Download - Rural Marketing Presentation (1) e-choupal
RURAL MARKETING
PRESENTATION
“e- CHOUPAL”
SECTIONS1) Introduction To ITC & e-Choupal
2) The e-Choupal System
3) Apprehensions To e-Choupal
4) Operating Environment Constraints Faced By ITC
5) Benefits For The Farmers
6) Social Impact Of e-Choupal
7) Gains For ITC
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 & Stationery• Safety Matches• Agarbattis
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
Category CAGR Growth parameters
Cigarettes 10.9 % Pricing power
Hotels 22.7% Inward traffic, occupancy
Paper 17.2 % Capacity utilization, value added products
Agri business
34.3 % e-choupal, choupal sagar,
FMCG-Others
60.2 % Fast track, decent share.
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)– Is innovative ( technology adoption, risk management)
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 Investment
Low ProductivityLow Value Addition
Low Margin
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
• Checks details• Does quality checks• Provides slips
Sanchalak
APPREHENSIONS TO e-CHOUPAL
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 e-CHOUPAL
Information That Is Available On e-CHOUPAL
• Weather
• Agricultural best Practices
• Customized Quality solutions
• Intelligent Product Deployment
GAINS FOR ITC
Wheat
Soybean
Soybean& Wheat
Coffee
Aqua
Wheat
Soybean
Soybean& Wheat
Coffee
Aqua
Scale Today and Vision Tomorrow
6 StatesKiosks: 6400
Villages: 40,000
Farmers: 4.1 million
Year 2007:
15 StatesKiosks: 20,000
Villages: 100,000
Farmers: 10 million
Year 2012:
• Supply Security
• Lowering ITC Logistic Cost
• Better Plan Future Operations
• True Cost Of Intermediation
• Reimbursement Of Transport Costs
Transaction Costs in Mandi ChainSoybeans Example
Farmer Incurs
Trolley Freight to Mandi = 120Labour = 50Kacchha Adat = 150Handling Loss = 50
Rs per MT
370
ProcessorIncurs
Commission to Agent = 100Cost of Gunny Bags (net) = 75Freight to Factory = 120Handling at Mandi = 40
335
Total Chain 705
Transaction Costs in Choupal ChainSoybeans Example
Farmer Incurs
Trolley Freight to ITC Hub = 120Labour = 50Kacchha Adat = 150Handling Loss = 50
Rs per MT
370
ProcessorIncurs
Commission to Sanchalak = 100Cost of Gunny Bags (net) = 75Freight to Factory = 120Storage & Handling at Hub = 40
335
Total Chain 705
120
50
Cash Disbursement Costs = 50
215
335
Conclusion
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
THANK YOU