E Choupal Case Essay

1746 words - 7 pages

Reaching To Underserved Consumers to Bring To Life Economic Growth
It is a fact that emerging markets will be the main contributors to the world’s economic growth. Companies around the world have seen the importance of reaching Low Income Consumers as the main source of expansion, knowing that in the long term, by improving their lives they would eventually turn into consumers with higher economic power that will be able to buy more products. One of the BRIC countries that are expected to account for almost a half of the GDP increase in the next years is India, and agriculture is a major contributor to this country’s GDP and accounts for more than have of the work force. However, these ...view middle of the document...

This situation motivated ITC to create e-Choupal.
Most of the previously stated problems where behind three major factors: Lack of transparency, trust and information. e-Choupal aimed to address these challenges by creating an information platform where computers with Internet access were installed in rural areas in the house of a trusted leader in the village to offer farmers the latest information in the agricultural industry, from prices to best practices. Before e-Choupal was implemented, more inefficient physical flows were taking place. First, farmers had to travel to the mandi and wait for the result of the action hoping they were one of the lucky ones that managed to sell their products as usually they had to wait 2-3 days to get into market due to the high number of farmers per day. Then, farmers relied on the CA’s offer and they didn’t have where to store unsold produce. When sold, they had to weight the produce manually in scales losing part of their product. Sometimes the CAs didn’t pay the farmer immediately so cash payment was delayed and paid after unofficial credit period. Finally, the CA brought product to ITC facilities selling at full market price. On the other hand, farmers didn’t have access to the proper information to make data-based decisions. The only way of knowing about market price information was through word of mouth so they weren’t able to negotiate the price with the CAs. They didn’t manage weather reports so planning the harvests based on the weather conditions was out of the table. Regarding best practices, they only got some poor education from the traditional Choupal so very little improvement could come from these lessons.
After e-Choupal was implemented, this scenario was turned around 360 degrees. Now farmers had the alternative to sell directly to one of the 44 ITC available hubs where the distance was the same as to the mandi but provided better facilities. The weighting system was significantly improved so they didn’t lose any revenues in this process. ITC hubs also served as shops where they could buy other products such as herbicides, soybean oil etc. They also got paid immediately and were reimbursed for freight costs. This new supply chain was accompanied with a complete new information system where they now had access to market price, demand and production information, weather reports to plan ahead their harvesting activities, data about best practices and global standards and a Q&A forum where they could ask whatever doubt they had.
The success of the new supply chain relied mainly upon the high level of trust that was given to the farmers and the rest of the players (Sanchalak and Samyojak) where no user was bound to a contract to only buy to ITC. The company was able to see this as a more long term solution where farmers would see by their own the benefits of being a more informed player in the industry. The second principle is empowerment of the people and proper training to initiate the...

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