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A Case Study


“Success Story of
ITC- E- Choupal: A Rural Initiative”

Case Study Submitted To

Balaji Institute of Modern Management (BIMM) Pune


Partial Fulfilment of the PGDM (Sales and Marketing)

For Academic Year 2016-2018


Anurag Lalchandani


I, Anurag Lalchandani, Student of BIMM – Balaji Institute of Modern Management,

Pune, Hereby declare that this case study entitled “Success Story of ITC- E- Choupal: A
Rural Initiative ” is a bonafide record of work done by me during the course of PGDM
program and all contents and facts are prepared and presented by me without any bias.

I also declare that it has not previously formed the basis for the award to me for any
degree/diploma associate ship, fellowship or other similar title, of any Institute/Society.

Place: Pune

Date: 28/02/2018

ITC's Agri Business Division, one of India's largest exporters of agricultural commodities,
has conceived e-Choupal as an efficient supply chain aimed at delivering value to its
customers around the world. The e-Choupal model has been specifically designed to tackle
the challenges posed by the unique features of Indian agriculture, characterised by
fragmented farms, weak infrastructure and involvement of numerous intermediaries.

The Value Chain - Farm to Factory Gate

'e-Choupal' also unshackles the potential of Indian farmer who has been trapped in a vicious
cycle of low risk taking ability, low investment, low productivity, weak market orientation,
low value addition, low margin, low risk taking ability. This made him and Indian
agribusiness sector globally uncompetitive, despite rich & abundant natural resources. Such a
market-led business model can enhance the competitiveness of Indian agriculture and trigger
a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer risk
management, larger investments, higher quality and productivity.

The Model in Action

'e-Choupal' leverages Information Technology to virtually cluster all the value chain
participants, delivering the same benefits as vertical integration does in mature agricultural
economies like the USA. 'e-Choupal' makes use of the physical transmission capabilities of
current intermediaries - aggregation, logistics, counter-party risk and bridge financing -while
disintermediating them from the chain of information flow and market signals. With a
judicious blend of click & mortar capabilities, village internet kiosks managed by farmers -
called sanchalaks - themselves, enable the agricultural community access ready information
in their local language on the weather & market prices, disseminate knowledge on scientific
farm practices & risk management, facilitate the sale of farm inputs (now with embedded
knowledge) and purchase farm produce from the farmers' doorsteps (decision making is now
information-based). Real-time information and customised knowledge provided by 'e-
Choupal' enhance the ability of farmers to take decisions and align their farm output with
market demand and secure quality & productivity. The aggregation of the demand for farm
inputs from individual farmers gives them access to high quality inputs from established and
reputed manufacturers at fair prices. As a direct marketing channel, virtually linked to the
'mandi' system for price discovery, 'e-Choupal' eliminates wasteful intermediation and
multiple handling, significantly reducing transaction costs. 'e-Choupal' ensures world-class
quality in delivering all these goods & services through several product / service specific
partnerships with the leaders in the respective fields, in addition to ITC's own expertise.

The Status of Execution

Launched in June 2000, 'e-Choupal', has already become the largest initiative among all
Internet-based interventions in rural India. 'e-Choupal' services today reach out to over 4
million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in
over 40000 villages through 6100 kiosks across 10 states (Madhya Pradesh, Haryana,
Uttarakhand, Uttar Pradesh, Rajasthan, Karnataka, Kerala, Maharashtra, Andhra Pradesh and
Tamil Nadu). The problems encountered while setting up and managing these 'e-Choupals'
are primarily of infrastructural inadequacies, including power supply, telecom connectivity
and bandwidth, apart from the challenge of imparting skills to first time internet users in
remote and inaccessible areas of rural India. Several alternative and innovative solutions -
some of them expensive - are being deployed to overcome these challenges e.g. Power back-
up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits,
installation of VSAT equipment, Mobile Choupals, local caching of static content on website
to stream in the dynamic content more efficiently, 24x7 helpdesk etc. Going forward, the
roadmap includes plans to integrate bulk storage, handling & transportation facilities to
improve logistics efficiencies. The enthusiastic response from farmers has encouraged ITC to
plan for extension of the 'e-Choupal' initiative to 15 states across India over the next few
years. Another path-breaking initiative - the 'Choupal Pradarshan Khet', brings the benefits
of agricultural best practices to small and marginal farmers. Backed by intensive research and
knowledge, this initiative provides Agri-extension services which are qualitatively superior
and involves pro-active handholding of farmers to ensure productivity gains. The services are
customised to meet local conditions, ensure timely availability of farm inputs including
credit, and provide a cluster of farmer schools for capturing indigenous knowledge. This
initiative, which has covered over 64,000 hectares, has a multiplier impact and reaches out to
around 70,000 farmers.

The development of India’s agri-sector is

critical because it needs to provide food
security to the estimated 1.5 billion people who
will inhabit our country by 2030. The sector
provides livelihoods to nearly half of India’s
workforce. The sector’s woes include
inadequate irrigation systems, shrinking
landholdings, erratic rainfall, rising farm
production and management costs, and
inadequate access to timely information, credit
and markets. Indeed, tens of millions of Indian
farmers are suffering. ITC e-Choupal is an
internet kiosk in the home of a fellow villager.
An innovative model embedded with social
goals, the ITC e-Choupal empowers farmers
and hopes to trigger higher productivity and income through a host of services related to
know-how, best practices, timely and relevant weather information, a transparent discovery
of prices, access to quality agri-inputs at competitive prices and so on. The lead villager
(known as a Sanchalak), is computer literate and trained by ITC to assist other farmers in
making use of the company’s specially designed agricultural website, where they can gather
critical information on soil quality, prices, weather, quality inputs and markets. e-Choupals
are much more than internet kiosks. They are generally located within walking distance or a
5-km radius. Instead of travelling long distances to the nearest mandi, the farmer takes a
sample of his produce to the e-Choupal. Here, the Sanchalak, using moisture metres and
other techniques, measures the quality of his produce and issues a conditional quote. The
farmer can see ITC’s price for himself on the website as well as the previous day’s prices at
nearby mandis on the computer.
If he decides to sell to the ITC hub, the Sanchalak gives him a note which includes his name,
village, particulars of the quality assessment, approximate quantity and conditional price.
The farmer takes the note along with his produce to the nearest ITC rural services hub called
Choupal Saagar, which falls within a 30-km radius. Here, further testing is conducted by
trained technicians. By operating across the agri-value chain, ITC is able to source raw
materials directly from farmers. The farmers are free to sell to anybody and are not tied
down to ITC with any written contracts. Through e-Choupal, farmers do get necessary
information about better farming practices and connections to markets for better prices, thus
liberating farmers from exploitative middlemen. However at the Choupal Saagar, farmers’
produce undergo electronic weighing and full payment happens within a couple of hours,
unlike mandis where it can take a couple of days. This system also gives the company
traceability of its key agri-inputs for manufacturing its popular brand of consumer food
products. These home-grown Indian brands in turn anchor the entire agri-value chain,
contributing to India’s agrarian economy. The firm also runs women empowerment
programmes particularly focusing on Ultra Poor Women, which enables development of
entrepreneurial skills, besides income generation. Over 54,000 women have been benefitted
so far through ITC’s women-focused initiatives. ITC’s rural initiatives also addresses the
challenge of depleting natural resources. ITC’s Soil and Moisture Conservation programme
works with local agricultural communities to develop and manage local water resources,
particularly in water stressed areas. This large-scale intervention in water stewardship covers
45 districts across 12 states and has brought the area under watershed to over 8,36,000 acres
through more than 10,000 water harvesting structures. “Farmers are provided with critical
information and relevant knowledge on farm productivity, prices and markets through the
ITC e-Choupal to enlarge their choices. This platform also enables access to quality inputs,”
says S Sivakumar, Group Head of Agri and IT Businesses, ITC Ltd. “Initiatives such as
Livestock Development and Women Empowerment create avenues for supplementary non-
farm incomes to protect against agri-income volatility as well as build capacities for
investment. So, though there are 6100 e-Choupals, the outreach has been expanding and
now caters to over 40,000 villages empowering over four million farmers.
In its next phase – the ITC e-Choupal 4.0, pilot for which has already started, the e-Choupal
intends to become an aggregator for a variety of agri-services after integrating them with the
on-ground presence of ITC’s agribusinesses across 70,000 villages.
The evolved model will cater to the new generation of agri- entrepreneurs and agrarian start-
ups dealing with a wide array of services from hyper-local weather forecasts to support
systems for precision agriculture; from sensors for smart irrigation to drones for crop-health
monitoring; from image processing for disease recognition to predictive analytics for
epidemic management; from next-gen farm management to online consumer outreach

History and Evolution

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited. As the Company's ownership progressively Indianised, the name of the
Company was changed from Imperial Tobacco Company of India Limited to India Tobacco
Company Limited in 1970 and then to I.T.C. Limited in 1974. The Company now stands
rechristened 'ITC Limited,' where ‘ITC’ is today no longer an acronym or an initialised form.
A Modest Beginning
1925: Packaging and Printing: Backward Integration
1975: Entry into the Hospitality Sector - A 'Welcome' Move
1979: Paperboards & Specialty Papers - Development of a Backward Area
1985: Nepal Subsidiary - First Steps beyond National Borders
1990: Paperboards & Specialty Papers - Consolidation and Expansion
1990: Agri Business - Strengthening Farmer Linkages
2002: Education & Stationery Products - Offering the Greenest products
2000: Lifestyle Retailing - Premium Offerings
2000: Information Technology - Business Friendly Solutions
2001: Branded Packaged Foods - Delighting Millions of Households
2002: Agarbattis & Safety Matches - Supporting the Small and Cottage Sector
2005: Personal Care Products - Expert Solutions for Discerning Consumers
2010: Expanding the Tobacco Portfolio
Creating Enduring Value
Today, ITC is India's leading Fast Moving Consumer Goods company, the clear market
leader in the Indian Paperboard and Packaging industry, a globally acknowledged pioneer in
farmer empowerment through its wide-reaching Agri Business and runs the greenest luxury
hotel chain in the world. ITC Infotech, a wholly-owned subsidiary, is one of India's fast-
growing IT companies in the mid-tier segment. ITC's Agri-Business is one of India's largest
exporters of agricultural products. The ITC Group’s contribution to foreign exchange
earnings over the last ten years amounted to nearly US$ 6.8 billion, of which agri exports
constituted 57%. The Company's 'e-Choupal' initiative has enabled Indian agriculture
significantly enhance its competitiveness by empowering Indian farmers through the power
of the Internet. This transformational strategy has already become the subject matter of a
case study at Harvard Business School. As one of India's most valuable and respected
corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C
Deveshwar calls this source of inspiration "a commitment beyond the market". In his own
words: "ITC believes that its aspiration to create enduring value for the nation provides
the motive force to sustain growing shareholder value. ITC practices this philosophy. ITC
group directly employs more than 32,000 people and the Company's Businesses and value-
chains generate around 6 million sustainable livelihoods many of whom live at the margin in
rural India.
Global Exemplar in Sustainability
Acknowledged as a global exemplar in sustainability, ITC is the only enterprise in the
world, of comparable dimensions to be carbon-positive, water-positive and solid waste
recycling positive. A testimony to its commitment to a low carbon growth path - over 47%
of the total energy requirements of ITC is met from renewable sources. All ITC's premium
luxury hotels are LEED (Leadership in Energy and Environmental Design) Platinum
certified making it the "greenest luxury hotel chain" in the world. ITC's Paperboards and
Paper business is an icon of environmental stewardship.ITC's production facilities and hotels
have won numerous national and international awards for quality, productivity, safety and
environment management systems. ITC was the first company in India to voluntarily seek a
corporate governance rating.The Company continuously endeavours to enhance its wealth
generating capabilities in a globalising environment to consistently reward more than
7,69,000 shareholders, fulfill the aspirations of its stakeholders and meet societal


It transmits Information (weather, prices,

It transfers Knowledge (farm management, risk
It facilitates sales of Farm Inputs (screened for
quality) and
It offers the choice of an alternative Output-
marketing channel (convenience, lower
transaction costs) to the farmer at his doorstep
e-Choupal is thus, distributed transaction platform that brings together sellers, buyers
along with information and service providers. e-Choupal is a model with a number of
non-conventional characteristics namely:
 Customer centric
 Capable of being used for many commodities and multiple transactions
 Easily scalable once it is verified
 Uses local talent and local people and develops local leaders
 Can be extended to local as well as global procurers
 Stimulates local entrepreneurs to extend their innovativeness
 Uses all the existing institutions and legal frameworks

Problems Identified

 How does ITC’s e-Choupal initiative fit into the overall strategy of the organization,
this would mean does ITC believe e-Choupal is a CSR initiative or a revenue
generating business process?
 ITC has to have a trade off perspective between economic profitability and socio-
cultural development of the Indian farmer. This does give rise to the question whether
the earnings are enough to sustain the e-Choupal as a business model.
 ITC’s International Business Division (IBD) oversees the e-Choupal. Can the
revenues earned be used for cross funding growth of ITC’s other divisions,
considering the fact that e-Choupal itself requires huge investments if important goals
and objectives have to be achieved?
 Another challenge for ITC is how to allocate IBD resources effectively? These would
be physical, financial, human and intellectual resources.
 ITC’s e-Choupal gives the company an access into the rural hinterland, but going
forward what are the different entities of their revenue stream is the key issue. So
what are the criteria which can evaluate the new business opportunities?
 ITC’s e-Choupal model has been an effective tool farmers can utilize during various
stages of agri-input and output supply chain linkages, but has this venture done
enough to generate overall socio-economic upliftment? The issues of concern here
o Has it generated enough employment?
o Is it prepared to face competition from agri-retailing?
o Is ITC’s IBD focused enough to face any risks?
ITC’s e-Choupal initiative is taking the choupal one step further by using technology as an
enabler and a backbone. We need to have a look at the hierarchy of needs of the farmer in
question, when we talk of hierarchy of needs; these range across the agri-supply chain.
Across the supply chain would mean that these would be needed to be provided to the farmer
at different points of the supply chain.


Agri Implements

Hierarchy of
Needs Agri Inputs

Crop Insurance




Market Access

ITC’s e-Choupal when started initially laid emphasis on a particular commodity i.e.
Soyabean. The needs of the farmer are taken care by providing inputs related to sowing,
weather and more crucially providing the right mechanisms for market access. Agri inputs
like fertilizers; information in the form of weather, price discovery, market conditions
(mandi prices/volume/international state of the crop) and this information culminates in the
form of market access to the end farmer.
The e-Choupal in the villages acted as a bridge to fill the gap between the farmer and him
getting the best price for his product/grain. ITC too had a business motive behind this; the
spill over effect of this help mechanism was
 ITC would get a better price for their exports because the end result would be that the
farmers output is of a better quality.
 The services mentioned above are provided by ITC with the help of the village
Sanchalak who holds a very good rapport with the farmer as well as ITC. Hence this
helps in having a better span of control and at the same time building the brand equity
of ITC.

 Limitations of the traditional Mandi system
o Issues in the agri supply chain, farmers not having access to quality inputs like
sowing seeds and fertilizers, and pesticides.

Operations of the Mandi System

Advantages of the Mandi System

 Price discovery in the form of an open auction.
 Wide reach and acceptance among farmers.
 Social protection in the form of it being government mandated .
Limitations of the Mandi System
 The Mandi system is burdened with inefficiency, like inefficient bagging and
weighing. Some amount of produce gets spilled over in the Mandi, sometimes
deliberately. This is in the form of spills of 0.5% of the original produce bought to the
Mandi. This translates into an economic loss of Rs: 100/ 100 kg.
 The farmer did not have the resources to analyze price trends.
 Other inefficiencies exist- like the overnight stays near the Mandi, crops displayed in
open air courtyards, the unscientific and arbitrary inspection process etc.
 Commission agents (CA’s) often collude in pricing, favouring agents and exploiting
the farmers.
 The CA inflates the price to buyers; without passing the benefits to the farmer.
 Sometimes CA used to buy at a lower price from the farmer and sell it to ITC at a
higher price. This results in a loss to both the farmer and the buyer i.e. ITC.
 Removing the non-value adding parts of the supply chain and making the supply
chain of soyabean (we have to keep in mind that the focus was on a single
commodity) and making the supply chain competitive and efficient.

Re-engineered Supply Chain via ITC e-Choupal

 Disintermediation- The ITC Process

o The new process gives advantages to the ITC in distribution, control and cost
o At the same time ITC had to face initial costs in setting up the infrastructure
and the costs associated in reaching the end farmer and bringing him into their
o For a long time these farmers have been trading with the CA in the Mandi and
they know that an open auction mechanism is the best, hence to jump onto the
bandwagon of ITC does involve hesitation. This hesitation comes with the
underlying pillars of trust and credibility. ITC had to invest heavily in terms of
manpower and financial resources in overcoming this disadvantage.
Transaction Costs- A comparison between Mandi System and e-Choupal

Mandi e-Choupal
Farmer Processor (ITC) Farmer Processor (ITC)
Transport Commission to CA Trolley Freight Commission to Sanchalak
Freight to hub
Labour at Transport Costs Storage & Handling at Hub
Handling Handling at Mandi Cash disbursement costs to
Loss Samyojak

The new supply chain formulated by ITC’S e-Choupal model brings in considerable cost
reduction and is beneficial to the farmer as well as processor.

People / Stakeholders involved

This aspect is very important when an organization is venturing into rural India; the reason
being the farmer is at the center of the business models. Hence, dealing with the attitudes and
beliefs of these individuals and gaining their trust becomes critically important. The
important players in this business model are:
 Farmer
o He is the main seller and also a prospect consumer of your products through
the e-Choupal initiative.
o He is also an important element in the communication mix of the organization.
This is a type of service that is going to bring farmers in the fold through the
word of mouth advertisement.
o The farmer is important because if he experiences credible and trustworthy
services, he is going to spread the word around.
o The direct benefits are in the form of savings in logistics costs; better price
discovery and more importantly value added services in the form of critical
 Sanchalak
o He is the grassroot salesperson of the e-Choupal business model. He is the
liaison between the company and the farmer.
o He also gains additional income and more importantly intangible benefits in
the form of praise and gain in social standing among farmers when he helps
his co-farmers in the same village.
o Intangible benefits in the form of computer skills and improvement in
communication skills.
o The important step should be that as competition emerges in the rural retail
scenario; he should be motivated enough to continue his association with ITC.
o At the moment there does exist no checks about his unlawful usage of the e-
Choupal equipment; but process checks and control mechanisms have to be in
place to control his actions. His implication in unlawful actions could shake
the very backbone of this business model.
o He is also an important element in the communication mix. His word would
carry power and would attract more farmers in the fold.
 Samyojak
o He earlier was the agent for ITC’s procurements from the mandi. In the new
business model there are opportunities where he can earn additional revenue in
addition to his commission.
o His role in the new setup is more of a consultant and at the same time he
commands excellent clout since an agent is exposed to many farmers and other
o He is also an important element in conveying market information (mandi
prices/local happenings).

These entities spoken of are major players in the business model. Hence, the company
should keep them at the center or the apex of the business model.
Secondly if ITC looks at the model from a development perspective, it should endeavour to
balancing economic profitability and assuming social responsibility at the same time.
 Sanchalak margins-3% gross margins over 3 months.
 Samyojak margins-4-5% margins over the entire year.
The Sanchalaks and Samyojaks are important blocks in the supply chain ensuring delivery
and pickup. However, if we look at the economic viability they do take away a considerable
chunk of the operating margins of the company. Can the company do away with one of the
intermediaries by reworking the processes.
Physical Evidence
 The e-Choupal set up in the various villages; gave the villagers a platform to come
and avail the services with the help of the Sanchalak. His home is where they used as
a meeting place earlier. Hence, the familiarity and comfortability aspect with the
environment was definitely there.
 The ITC hubs wherein the farmers had to take their produce for selling; had a tent
provided and also a rest place; these were in stark contrast to the amenities provided
at the Mandi.

 There were no visible aspects of promotion in the traditional formats of mass media.
 But ITC e-Choupal was based on trust and holistic development of the farmers
involved. Hence it relied more on word of mouth or references.
 The farmer, Sanchalak and the Samyojak act as influencers; because in a rural setup
these are the people whom the villagers trust and hence it becomes necessary for ITC
to focus on these important individuals.
Sustainability of the ITC e-Choupal Model

We believe that sustainability would be achieved when economic, social and institutional
sustainability is achieved. We would like to examine the sustainability of the e-Choupal
business model
Economic Sustainability
This is achieved when a given level of expenditure can be maintained over time.
o The critical element is whether this model/venture is profitable and does your
organization have the financial resources to sustain the initial years of not
being able to breakeven.
o As discussed earlier new revenue streams have to be added. Mr. Sivakumar
has to leverage the reach of the e-Choupal model to act as an efficient
marketing channel for ITC’s own products or other companies products
o The options in mind have to be evaluated keeping in mind the resources and
the capabilities that it has or can be acquired:
 The options mentioned are mostly agri-inputs in the form of seeds and
fertilizers. There would be issues related to channel conflicts with the
traditional distribution channels. This could result in undercutting
among the various players. Hence, it would be detrimental in the long
 Credit and Insurance are moving the farmer up the value chain in terms
his needs. This does hold immense potential as there is a huge potential
in terms of tapping the savings of the rural consumers. The insurance
density is very low and introduction of new products in the form of
weather insurance could definitely generate revenue in the form of
commissions and brokerages. There would be issues in the form of
credit risks and hence there have to be mechanisms by which the
receivables could be routed through another organization (like FMCG/
consumer durables).
Social sustainability
This is achieved when social exclusion is minimised and social equity maximized.
ITC’s e-Choupal has done remarkably well to include the farmers at every step of the
supply chain; this has been done by providing them information and more
importantly market access. This has reduced exploitation by the traditional
intermediaries and bought about their social upliftment.
 We believe every new project or a business model has to have performance metrics in
mind; we believe the success of the e-Choupal at the moment more than monetary is the
ability to get farmers in its fold. This is the biggest indicator of social sustainability and
this venture we believe is not only a combination of volume game but also one of
margins. The reason being you are selling a differentiated service accompanying a very
generic commodity (food grains and volatile.

Institutional sustainability
This is achieved when prevailing structures and processes have the capacity to
continue to perform their functions over the long term.
o At the moment there are existing structures and processes in place; but going
ahead it is important to note that scalability would give rise to issues. The
model has worked very well with the Soyabean crop; but considering that ITC
would have limited exposure to other regions and their vegetation, these
structures and processes would have to be modified or altered to suit local
o A very good example of institutional sustainability was the incorporation of
the CA into the business model.
o We feel going forward ITC has to keep the following points in mind:
 Well-defined processes and rules in place.
 Participatory policy formulation and decision making processes.
 Effective organisational structure that creates a framework within
which the livelihoods of the stakeholders can be continuously

India holds tremendous potential in the rural retailing front. Providing market access to
farmers and information is just one of the means of generating revenue. ITC’s e-Choupal
initiative is more of a CSR initiative. The competition would also be more potent in the years
to come; but then I feel that the ITC e-Choupal initiative is sustainable and scalable and
achieve overall economic development of the farmers in the rural countryside. But going
forward ITC’s focus should be on leveraging the strength of its rural reach to cross sell other
products thereby achieving volumes and adding value to the stakeholders involved.
This model is sustainable if economic sustainability is achieved with the help of
both value and volume. Hence, it is necessary to scale the number of outlets;
get into various states with diverse crops.

 Organic growth with an increase in the number of outlets. These outlets should have
revenue streams sustainable over the entire year. Some methodologies are :-
o ITC has to leverage its e-Choupal infrastructure to sell third-party products,
providing rural market research services, and in the social sector, to provide
services like health advisories and enable e-governance.
o ITC’s e-Choupal should provide best of the class retailing and shopping
experiences to the rural consumers by building retail shopping complexes that
provide integrated facilities under one roof. There exists potential to brand
these outlets providing all the facilities under one roof.
o I believe the ITC hubs have tremendous potential in the form of rural health
o ITC e-Choupal has the potential of delivering quality education services to the
rural areas leveraging the physical and digital infrastructure developed for
commodities sourcing and consumer retail services.
o Scaling up of the e-Choupal initiative by offering multiple services under one
roof for the rural population. This includes a marketing platform, storefront for
agri-equipment, personal consumption products, health centre and insurance
 Technology platforms such as the mobile reach must be harnessed to improve services
and scale up operations.
 Look out for external funding in the form of FDI in back end operations. This will
infuse much needed finance helping it scale its operations. We believe finance should
not be a problem as ITC as a parent company does have the power to up-scale further.
 The Sanchalaks are selected carefully and they have been able to work as
coordinators. Sanchalaks have been able to induce the feeling of involvement. Trust is
essential in sustaining relationships at the community level.
 E-choupal was customized and then validated and then expanded to the
operational phase. E-choupal has found acceptance in all three businesses they
have ventured into. The model of validating and then rolling it out has been an
effective way of implementing a new business model.
 E-choupal has provided economic benefits even for the small farmers. Every
beneficiary gets benefit and the equitable benefits makes the adoption very
 Intensive training and distributed leadership concept facilitated the acceptance of
the platform concept. The empowerment of people through local action and
training reduces the disparities. The ability of the choupals to deal with manyinputs
provides for economies of scope. In implementing this project, the interests of a chain
of small and medium traders were hurt because of the process of disintermediation.
However, ITC recognized the resistancethat would be built up if the role of
intermediaries were completely eliminated. Inintroducing e-choupals, ITC has
redefined the role of the local intermediaries from that ofprocurement to that of
facilitation and information gathering. In the process, ITC hasensured that at least a
part of the income derived by intermediaries through trading
commissions is replaced by commissions or service charges paid by ITC to these
 This has helped ITC in overcoming any resistance from these traders.Instead of
creating an entirely new mechanism of direct procurement, ITC has chosen to
strengthen an existing institution in rural areas, the choupal, which serves as the focal
point for the exchange of ideas and information by word of mouth in rural
 By locating a PC and Internet access at such meeting points, ITC has enlarged the
scope and quality of information exchange.

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