RURAL MARKETING PRESENTATION

“e- CHOUPAL”

SECTIONS

INTRODUCTION

Vision & Mission statements
• Vision: Sustain ITC’s position as one of India’s most valuable corporations through world class performance, creating growing value for the Indian economy and the Company’s stakeholders. • Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

Business Mix of ITC Ltd.
FMCG • Cigarettes • Foods • Lifestyle Retailing • Greeting, Gifting & • Safety Matches • Agarbattis

Stationery

Paperboards & Packaging • Paperboards & Specialty Papers • Packaging

Business Mix (Cont’d)
Agri – Business
• Agri-Exports • e-Choupal • Leaf Tobacco

Hotels
Group Companies • ITC Infotech; etc.

CAGR during FY 2005-2008

Market share of ITC Ltd.
Outstanding market leader • Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports. Gaining market share • Nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.

THE E –CHOUPAL SYSTEM

Indian Agriculture Has Excellent Resources • Plenty of Arable land – Rich & diverse Agro-climatic zones – Strong Agricultural Research – Large & growing markets • Indian Farmer’s resourcefulness is also legendry – Works very hard ( whole family is on the farm) – Takes risk ( on weather ,yields , price) –

The Devil
• The Middleman – Lends Money , source of inputs , buys output

• But blocks information flow & market signals and extracts larger profit for himself – Also spins an exploitative cycle of dependency – Therefore evil

…And the Implications

Low Risk Taking Ability Low Margin Low Value Addition Low Investment Low Productivity

Weak market Orientation

The e-Choupal Infrastructure
• ITC Kiosk with Internet Access – In the house of one trained farmer, Sanchalak – Within walking distance of target farmers • Warehousing Hub – Managed by the erstwhile middleman, Samyojak – Within tractor able distance of target farmers

Structure of e-Choupal

APPREHENSIONS TO eCHOUPAL

RISKS:
• Radical shifts in computing access . • Threat of unionization of sanchalaks and rent extractions. • The diversity of activities and speed of expansion create threats to efficient management.

Managing Bureaucracy:
• The agricultural produce marketing act prohibits procurements outside the mandi. • The government offered to waive the mandi tax on the produce procured through the e-Choupal. • But tax was not making ITC uncompetitive therefore ITC continuing paying taxes.

OPERATING ENVIRONMENT CONSTRAINTS FACED BY ITC

TECHNOLOGY
• Overcoming power constraints Unreliable Quality • Transportation • Telecom infrastructure

CHALLENGES
• Radical shifts in computing access could fundamentally alter community-based business models. • Threats from sanchalaks • relationship with the samyojaks • Scope of the e-Choupal operation

BENEFITS FOR THE FARMER

1) Relevant & Real-time Information 2) Better Decision Making, Hence Better Value For Crop 3) Farmer No Longer Bears Transportation Cost 4) Electronic Weighing Facilities – Avoids Intentional Spillage 5) Treatment As That Of A Respected Customer 6) Increment Of 2.5% Over The Mandi System 7) Information Also Provided To Improve Yield

Additional Services
Managing Credit Risk Through Sanchalak Network Non-cash Loans For Farm Inputs Loans To Sanchalak Direct Loans To Farmers Based On Sanchalak Recommendations Insurance & Risk Management

SOCIAL IMPACT OF eCHOUPAL

Information That Is Available On eCHOUPAL • Weather • Agricultural best Practices • Customized Quality solutions • Intelligent Product Deployment

GAINS FOR ITC

Scale Today and Vision Tomorrow
Year 2007: 6 States Kiosks: 6400 Villages: 40,000 Farmers: 4.1 million Year 2012: 15 States Kiosks: 20,000 Villages: 100,000 Farmers: 10 million
Wheat Soybean Soybean & Wheat Coffee Aqua

• Supply Security • Lowering ITC Logistic Cost • Better Plan Future Operations • True Cost Of Intermediation • Reimbursement Of Transport Costs

Transaction Costs in Mandi Chain
Soybeans Example
Rs per MT
Trolley Freight to Mandi = 120 Labour = 50 Kacchha Adat = 150 Handling Loss = 50

Farmer Incurs

370

Processor Incurs

Commission to Agent = 100 Cost of Gunny Bags (net) = 75 Freight to Factory = 120 Handling at Mandi = 40

335

Total Chain

705

Transaction Costs in Choupal Chain
Soybeans Example
Trolley Freight to ITC Hub = 120 Labour = 50 Kacchha Adat = 150 Handling Loss = 50

Rs per MT

Farmer Incurs

370

120

Processor Incurs

50 Commission to Sanchalak = 100 Cost of Gunny Bags (net) = 75 Freight to Factory = 120 Storage & Handling at Hub = 40 Cash Disbursement Costs = 50 705

335

215

Total Chain

335

Conclusion

THANK YOU
1) PANKAJ JAIN - 102 2) ROBIN KAPOOR 3) VIKAS SHARMA 4) POOJA GUPTA - 103 5) TUSHAR GARG 6) ANSHUL YADAV - 92 7) DEEPAK KUMAR 8) INDRAJEET SINGH - 96

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer: Get 4 months of Scribd and The New York Times for just $1.87 per week!

Master Your Semester with a Special Offer from Scribd & The New York Times