ITC's e-Choupal: Taking E-Business to Farmers

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Case Details:

Case Code : ITSY023
Case Length : 15 Pages
Period : 2000-2002
Pub Date : 2003
Teaching Note :Not Available
Organization : ITC
Industry : Varied
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Detailing the e-Choupal Initiative

Traditionally, a farmer sold his agricultural produce to a small trader referred to as a 'Kaccha adat.' The small trader then sold the products to a larger trader called the 'Pakka adat', who sold the produce in a 'mandi' (market place)...

Overcoming Problems & Challenges

Building and expanding the e-choupal initiative was not an easy task for ITC. The company faced several problems like intermediary unrest, widespread illiteracy, outdated telephone exchanges and sporadic electricity supply. However, ITC evolved innovative ways to overcome these problems. At places, where the connectivity was poor due to the lack of proper telephone lines, ITC upgraded the telephone lines using RNS kits (RAX Network Synchronisation) and in some cases, by using VSATs to by-pass the telephone lines completely. To deal with problems related to bandwidth , the company made use of specially devised technical solutions to manage data along with new imaging techniques...

On an Expansion Spree

Having succeeded in the experiment with soyabean, ITC began to look for new avenues to expand its business...

Beyond Commodity Trading

Once the e-choupal initiatives began generating good results, ITC realized it could further leverage the business potential of the choupals...

Looking Ahead

By January 2003, the e-choupal network included 1,286 kiosks covering nearly a million farmers in around 9000 villages. Satisfied with the kind of enthusiasm shown by the farmers for the initiative, ITC was reportedly planning to scale up its activities further.

It planned to expand at a rate of 3-4 choupals a day and establish 20,000 choupals covering 100,000 villages in 11 more states (approximately one-sixth of rural India). The company had plans to expand into other crops (like spices) besides the ones being covered till the beginning of 2003. The company planned to target international exports worth $ 400 million by 2005.

Exhibits

Exhibit I: Agri-Business Initiatives Taken Up By Some Indian Companies
Exhibit II: ITC's Achievements
Exhibit III: ITC – Income & Expenditure Statements
Exhibit IV: The Traditional Procurement Model

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