Leveraging ITC for Rural Mktg

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Leveraging ICT for Rural MarketingAmit K Roy ITC LTD - IBD

FICCI RURAL MARKETING SUMMITMay 10th 2007, New Delhi


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What we keep hearing about RuralWhat we keep hearing about Rural Large Population baseLarge Population base

Lower IncomesLower Incomes

Monsoon DependentMonsoon Dependent Rural is differentRural is different

Limited Media reachLimited Media reach

IlliteracyIlliteracy

Poor InfrastructurePoor Infrastructure

Spurious ProductsSpurious Products

Unviable Direct DistributionUnviable Direct Distribution

Insufficient ResearchInsufficient Research


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We Believe that the Incomes inWe Believe that the Incomes inRural are low because ofRural are low because of

FragmentationFragmentation Geographical DispersionGeographical Dispersion

HeterogeneityHeterogeneity

Weak InfrastructureWeak Infrastructure

Scope of my PresentationScope of my Presentation

Talk about implications of these realitiesTalk about implications of these realities

Explain how IT makes a positive DifferenceExplain how IT makes a positive Difference

Illustrate through ITCIllustrate through ITC eChoupaleChoupal case Studycase Study


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Efforts made so farEfforts made so far

Unbundled InstitutionsUnbundled Institutions Right Solutions, but oneRight Solutions, but onecan only go this far.can only go this far.

Institutional Credit : Constrained by difficult Counterparty risInstitutional Credit : Constrained by difficult Counterparty riskkmanagement.management.

GovtGovtAgriAgri Extension workerExtension worker High Cost and low impactHigh Cost and low impact

AgriAgri Input CompaniesInput Companies-- Typically Product FocusTypically Product Focus

Cooperative SocietiesCooperative Societies Benefits Cornered by a few .Benefits Cornered by a few .

MandiMandi Ideal Price Discovery, Sunk cost on transportation , forcesIdeal Price Discovery, Sunk cost on transportation , forcesFarmers to Sell.Farmers to Sell.

Higher Transactions cost and malpractices by tHigher Transactions cost and malpractices by the middlemenhe middlemen


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Which resulted in ..Which resulted in ..

Low Productivity

Low Investment

Low Risk Taking Ability

Low Incomes


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Implications for Rural marketersImplications for Rural marketers

Passive DistributionPassive DistributionWeak InfrastructureWeak Infrastructure

Not worthwhile toNot worthwhile to customisecustomiseHeterogeneityHeterogeneity

High Cost of reachHigh Cost of reachGeographicalGeographical

DispersionDispersion

Reward: Effort ratio better in UrbanReward: Effort ratio better in UrbanFragmentationFragmentation

ImplicationImplicationRealityReality


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Which resulted in


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ENTER IT - Illustration The ITC eChoupal


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The Problem Faced by FarmerThe 2 DsThe Problem Faced by FarmerThe 2 Ds DEEP SEADEEP SEA -- Institutional supportInstitutional support

Information on farming best practices/Information on farming best practices/

weatherweather

Quality and information on InputsQuality and information on Inputs

DEVILDEVIL Middle MenMiddle Men

Price DiscoveryPrice Discovery

Quality and weighmentQuality and weighment

Handling LossHandling Loss

TimeTime


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TheThe eChoupaleChoupal Information and Communication Technology Infrastructure at eachInformation and Communication Technology Infrastructure at each

eChoupaleChoupal..

Computer with printerComputer with printer

Internet connectionInternet connection

Solar PanelSolar Panel

VSATVSAT

This farmer called This farmer called SanchalakSanchalak is is

EducatedEducated

A progressive farmer middle size farmer.A progressive farmer middle size farmer.

Well respected by fellow farmersWell respected by fellow farmers Not a businessmanNot a businessman

A formal training is imparted to the Sanchalaks on the usage of the ICT

infrastructure.


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Power Connectivity

Training Content

Overcoming OddsOvercoming Odds


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e helps overcome 2Ds..e helps overcome 2Ds..Unbundling Information and TransactionUnbundling Information and Transaction

Price Discovery before deciding to sellPrice Discovery before deciding to sell

Freedom of choice for transactionFreedom of choice for transaction

PaymentPayment Cash on spotCash on spot

Bundling Information, Knowledge and TransactionBundling Information, Knowledge and Transaction

Knowledge on Farming best practicesKnowledge on Farming best practices

Information on WeatherInformation on Weather

High Quality Products and SolutionsHigh Quality Products and Solutions UsageUsage

Power of scale to farmers Overall improvement in productivity Sanchalak has build tremendous Trust and Credibility in

the Village.


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Relevant & Real-time Information

Commodity prices, Local Weather, News

Customised Knowledge

Farm Management, , Risk Management

Direct Marketing Channel for Farm Produce

Lower Transaction Costs, Better Value through Traceability

Supply Chain for FMCGs, Vehicles, and Farm Inputs Screened for Quality,

Demand Aggregation

Competitive Prices

Efficient Logistics

Financial Services Life, General , Health and Crop Insurance

Education

The eChoupal Services


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Whats in it for the farmer?

Bottom line for the farmer

Increased yieldsIncreased yields

Improved QualityImproved Quality

Reduction in Transaction costsReduction in Transaction costs

Power of Scale to the Small Farmer

Customized Knowledge despite Heterogeneity

Real time information despite Distances


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The Network SizeThe Network Size

Our Vision - 20000 choupals ,covering 100, 000

villages in 16 states

3393533935No of VillagesNo of Villages

61706170150150TotalTotal

10010033Andhra PradeshAndhra Pradesh

10010022KarnatakaKarnataka

8708702525RajasthanRajasthan

100010002626MaharashtraMaharashtra

210021004848Uttar PradeshUttar Pradesh

200020004646Madhya PradeshMadhya Pradesh

ChoupalsChoupalsHubsHubsStateState


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Distribution thruDistribution thru eChoupaleChoupal

Company O/Company O/lsls egeg TVS,TVS, EicherEicher etcetcLead Customers to respectiveLead Customers to respectiveSpecial ProductsSpecial Products

Hypermarket @Hypermarket @ ChoupalChoupal SaagarSaagarBulk buy and High ValueBulk buy and High Value

b) Aggregates Demandb) Aggregates Demand

a) Continuous Inventorya) Continuous Inventory

SanchalakSanchalakFacilitates DistributionFacilitates DistributionContinuous AvailabilityContinuous Availability

Active ServicingActive Servicing uptoupto rural outletsrural outletsDaily BuyDaily Buy

MechanismMechanismCategoryCategory


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Marketing Services thruMarketing Services thru eChoupaleChoupal

DistributionDistribution ResearchResearch

CommunicationCommunication

Micro MarketingMicro Marketing

SamplingSampling

Product DemonstrationProduct Demonstration


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Choupal Sagar Can make a difference..


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State of Art facility forProcurement.


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Setting new benchmarks in shopping experience for ruralSetting new benchmarks in shopping experience for rural

ConsumersConsumers


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Wide Range of Product CategoriesWide Range of Product Categories


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Coming out with Families

Increasing.


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RecapRecap

ICT Ingredients of ITC eChoupalICT Ingredients of ITC eChoupal

Deliver realDeliver real--time information and customisedtime information and customised

knowledgeknowledge

Aggregate demand and access high qualityAggregate demand and access high quality

products at lower costproducts at lower cost

Act as a direct marketing channel allowing efficientAct as a direct marketing channel allowing efficient

logistics managementlogistics management

Provide products as per the needs of the villagersProvide products as per the needs of the villagers


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Thank YouThank You

Documents

Leveraging ITC for Rural Mktg