E Business Operations

ITC-e chaupal
Presented By
Pankaj Murudkar [063] Vinay Nadar [064] Sachin Bajaj [066

Introduction
India is second most populated country in the world. Agriculture is the backbone of Indian economy. It contributes around 26% of the total GDP.

Agriculture provides livelihood to about 65% of the labour

force and accounts for 8.56% of India's exports.

The fragmented farms are constraining the risk taking ability

of Indian farmer locking him up into a vicious cycle of :

low risk taking ability, low investment, low productivity, weak market orientation, low value addition, low Margin, low risk taking ability.

Low Risk Appetite

Low Margins

Caught in a vicious cycle of underdevelopment

Low Investment

Low Value Addition Weak Market Orientation

Low Productivity

OUTPUT SALES :
Price Information is available only when the farmer is ready to transact. By then he has already travelled 30 km out of his village Sunk costs put pressure to sell, whatever the price is

Middlemen extract high transaction fee, since there is no other option for the farmer

INPUT PURCHASE :
Exactly the reverse of the above situation, but again to farmers disadvantage.

Information and Knowledge not available when he wants to transact

 Its a public conglomerate company headquartered in

Kolkata. Currently headed by Yogesh Chander Deveshwar Number of Employees 26000 Revenues US $ 7 bn. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, AgriBusiness, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.

 e-choupal is a Hindi word which means village

meeting place. Market is a meeting place where vendors and customers come together to do transactions. e-choupal is a virtual market place where farmers can transact directly with a processor and can realize better price for their produce. Idea Generation The idea of creating and leveraging an electronic market place came from the brainstorming session done by senior executives of ITC-IBD.

The eChoupal Infrastructure Tier 1 : An ICT kiosk with Internet Access

In the house of a trained farmer Sanchalak Within walking distance of target farmers Additional investments in Solar Power & VSATs to overcome weak infrastructure

The eChoupal Services

Relevant & Real time Information - Commodity prices, Local Weather, News

Customized Knowledge - Farm Management, Risk Management

Direct Marketing Channel for Farm Produce - Lower Transaction costs, better Value through Traceability Supply Chain for Farm Inputs -Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics

Education
Financial Services Life General, Health & crop Insurance

Pricing

Inbound Logistics

Inspection Grading

Weighing and Payment

Hub Logistics

Technolog ical support

Pricing
Previous days closing price used as benchmark price for

next day Mandi prices communicated to sanchalak through e-Choupal portal Sanchalak inspects the sample, assesses quality and gives farmer a conditional quote and a note (name/village/quality tests/approx. quantity/conditional price), if farmer decides to sell to ITC

Pricing

Inbound Logistics

Inspection Grading

Weighing and Payment

Hub Logistics

Technolog ical support

Inbound Logistics
Farmer proceeds to the nearest ITC procurement hub with

the note Some procurement hubs are ITC factories, others are purely warehouse operations ITCs aim is to have a processing centre within 30-40 km radius of its farmers

Pricing

Inbound Logistics

Inspectio n Grading

Weighing and Payment

Hub Logistics

Technolo gical support

Inspection and Grading

At the ITC procurement hub, laboratory tests are conducted

on a sample of farmers produce To change farmers attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply

Pricing

Inbound Logistics

Inspectio n Grading

Weighing and Payment

Hub Logistics

Technolo gical support

Weighing and Payment

Farmers produce is weighed on electronic weighbridge He is then given full cash payment Freight expenses are reimbursed Appropriate documentation at each stage and farmer is

given a copy of that Samyojaks handle cash operations

Pricing

Inbound Logistics

Inspectio n Grading

Weighing and Payment

Hub Logistics

Technolo gical support

Hub Logistics
Farmer transports his produce to the nearest processing

centre or storage hub ITC incurs the transportation cost The farmer bears the risk of transportation until produce is delivered and the sale is completed

Pricing

Inbound Logistics

Inspectio n Grading

Weighing and Payment

Hub Logistics

Technological support

Technological support
Nodal platform catering to commodity blending, agricultural

trading, e-choupal &rural distribution 24,000 personalized business function points 110,000+ pre-built business function points Integrated Business Systems for Direct Agriculture Procurement, Rural Distribution, e-Choupal Management, Exports, Insurance, Aqua Processing & Commodity blending Support for 8 local languages

1. Freedom Of Information
- Information & Knowledge is free of cost - No Initial investment of the Sanchalak -Not subsidized - Govt does not pay, the shareholders look for a competitive return

2. Freedom Of Transaction
- Farmers are free to sell their products any where

3. Entrepreneurship
- No salary paid to Sanchalaks a commission based model

Whats in it for ITC ?

Whats in it for farmer?

Whats in it for Customer?

Increased Yield Better Supply chain for ITCs Food & Agri Businesses

Better Quality Food & Agri Products

Access to the Undeserved Rural Markets

Improved Quality

Low cost as compared to other competitors

New ITES Business Opportunities

Reduction in Transaction Costs

Low shelf life agri products are available for the maximum time

Shareholder Value through Real Time Information despite distances Serving Society Elimination of non value added activities

Low Cost Last Mile

Distribution at low cost Wide reach in Rural India High Credibility Increased product penetration Right prices to consumers Continuous Visibility/Availability

Intelligent Fast Mile

Sharply Targets Customers Product Endorsement Education or product usage and benefits Brand Building at low cost Superior understanding of rural consumers

Football to Business
High Quality of Products and Services Right Prices Shopping environment