ITC e-Choupal

iksaanaaMo ko iht maMo ¸iksaanaaoM ka Apnaa


Agriculture Scenario in India
• India has second largest arable land in the world • One of the largest domestic consumption base • Attractive emerging export market • Diverse climatic zones allow growing of a variety of crops through the year • Growing demand for processed food

• Necessity to go beyond Rural markets • Government doubling it rural spending • New tax incentives for food exports


About ITC …..
• ITC is one of the largest corporation with its presence in Tobacco, Hotels, Paper Boards, Foods, Fashion Retailing And Commodity Export • ITC international business division was created in 1990 as an Agri Trading Company engaged in exports of a range of agriculture commodities • They believe in using a business model that does good to society and helps in improving the standard of living of Stake Holders

e-Choupal Concept
• E-Choupal is a virtual market place where farmers can transact directly with the processor and can realize the better price for the produce. • Provides for transparent transactions by free flow of information • Elimination of some levels of intermediaries • Connects large / small crop producers and small/ large users

Mandi Distribution system
Dept. of Agriculture (Weather, Insurance) Village Trader Money Lenders Seed Companies stockiest & retailers Ghani


Wholesaler (20-80%)

Regulated Markets Or Mandis (15-75%)

Commission Agent (Kachha Adtiya)

Trader (pakka Adtiya)

Producer Co-ops (3 – 5 %)

Producers, Private Oil Miller

Cooperative Mill


Mandi Operation Process

Inbound Logistics

Display & Inspection


Bagging & Weighing


Outbound Logistics


Limitations of Mandi System
• It is inefficient as there are no resources to analyze price trends • The timing of the sale may not result in the optimal price for the crop • Also the delayed sale time at the auction makes it more difficult for the farmer to sell his product at some other Mandi • Farmers also bear the cost of bagging and weighing

• The inspection process does not provide incentive to the farmer to invest in better seeds and better practices (water project) • The key problem is the agents control the market asymmetrical information flow (price, quality) • Mandi system Doesn’t Give the assurance of Sale of Crop on a Particular day, that Increases the Transportation cost.

The desired necessities for e-Choupal
• Re-engineer, Not Reconstruct • Caters to the entire community needs and not focusing on just one necessity • Fusion of agriculture and IT • Risk assessment and mitigation • Moving away from government shadow


e-Choupal Distribution System

Dept. of Agriculture (Weather, Insurance)

Money Lenders

Seed Companies stockiest & retailers

e - Choupal

Producers, Private Oil Miller

Cooperative Mill



Inbound Logistics

Inspection Weighing & Grading & Payment

Hub Logistics



Sources for scaling the model
• Crop Specific Intervention • Low-Cost Last Mile • Intelligent first-mile


The e-Choupal Services
• Relevant & Real-time Information
– Commodity prices, Local Weather, News

• Customised Knowledge
– Farm Management, Risk Management

• Supply Chain for Farm Inputs
– Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics

• Direct Marketing Channel for Farm Produce
– Lower Transaction Costs, Better Value through 15 Traceability

• Marketing Services
– Market Research – Brand Building – Product Demonstration

• Governance services
– Bhoomi

• Health with Private Health Service Providers
– Apollo

• Education

Choupal Sagar level Services
 Soil Testing  Medical facilities  Bank & Insurance  Entertainment  Cafeteria  Petrol/ Diesel Station


Operating Environment
• • • • • • • Power Constraints Transportation Telecom Infrastructure Customer Base Technical Architecture Application Architecture Information Architecture

What’s in it for ITC
• Better supply chain for ITC’s Food & Agri Businesses
– Costs, Quality, Traceability

• Access to the Underserved Rural Markets
– Through a Virtuous Cycle created by “Larger Incomes”, and founded on “Trust” that is built

• New ITES Business Opportunities
– Health, Education, Entertainment, eGovernance

• Shareholder Value through Serving Society
– Also, the infrastructure serves as a reliable delivery mechanism for resource development initiatives (e.g. water management) 19

Social Impact of e-Choupal
• • • • • • Educating Rural Masses Weather Forecasting Best Agricultural Practices Spoon Feeding Quality Solution Intelligent product Development Educating the farmers regarding seeds and fertilizers and providing the required materials.

• • • • • Commission Agents Mandi Laborers Bazaars Near the Mandi Some Mandi operations Competing Processors


The Impact …
• ITC procures 80% of its procurement via Web Channels • In 9 months ended Dec 2006 ITC-IBD clocked revenues of Rs2762.63 Cr as per the turnover of 9137.17Cr • It covers over 31000 villages, reaching out to 3 million farmers through 5200 kiosks • Adding Six New Choupals Every Day Intend Scaling up to 100,000 Villages in 15 States by 2010.

Current Network Size
State Madhya Pradesh Uttar Pradesh Maharashtra Rajasthan Karnataka Andhra Pradesh Choupals 1750 1750 900 500 100 150 Hubs 43 42 22 15 2 3

Success Factors
• • • • • • • Cost effective model Contraction of supply chain Own storage facilities Reduction in transportation cost and time Lower but more specialized skill labor Higher equipment utilization Easier production planning and control

A Glimpse into ITC e-Choupal… Thank You!!!

Nitin Sehgal 62 Pranav Arora 67 Uzma Qumar 70 Shitiz Wadhawa 93 Sumit Agrawal 107 Sumit Rawal 108


Sign up to vote on this title
UsefulNot useful