rural marketing presentation (1) e-choupal
TRANSCRIPT
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RURAL MARKETING
PRESENTATION
“e- CHOUPAL”
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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
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INTRODUCTION
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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.
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Business Mix of ITC Ltd.
FMCG• Cigarettes• Foods• Lifestyle Retailing• Greeting, Gifting & Stationery• Safety Matches• Agarbattis
Paperboards & Packaging• Paperboards & Specialty Papers• Packaging
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Business Mix (Cont’d)
Agri – Business• Agri-Exports• e-Choupal• Leaf Tobacco
Hotels
Group Companies • ITC Infotech; etc.
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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.
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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.
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THE E –CHOUPAL SYSTEM
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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)
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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
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…And the Implications
Low Risk Taking Ability
Low Investment
Low ProductivityLow Value Addition
Low Margin
Weak market Orientation
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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
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Structure of e-Choupal
• Checks details• Does quality checks• Provides slips
Sanchalak
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APPREHENSIONS TO e-CHOUPAL
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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.
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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.
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OPERATING ENVIRONMENT CONSTRAINTS
FACED BY ITC
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TECHNOLOGY
• Overcoming power constraints
Unreliable
Quality• Transportation• Telecom infrastructure
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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
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BENEFITS FOR THE FARMER
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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
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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
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SOCIAL IMPACT OF e-CHOUPAL
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Information That Is Available On e-CHOUPAL
• Weather
• Agricultural best Practices
• Customized Quality solutions
• Intelligent Product Deployment
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GAINS FOR ITC
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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:
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• Supply Security
• Lowering ITC Logistic Cost
• Better Plan Future Operations
• True Cost Of Intermediation
• Reimbursement Of Transport Costs
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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
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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
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Conclusion
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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