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Case Title:

ITC: Reshaping the Lives of Indian Farmers

Publication Year : 2006

Authors: Amy Sonpal, Joel Sarosh Thadamalla

Industry: Conglomerates

Region:India

Case Code: IPD0064A

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
Launched in June 2000, 'e-Choupal ', a revolutionary initiative by the Indian FMCG giant ITC, became the largest initiative among all e-commerce interventions in rural India. By 2006, 'e-Choupal' reached out to more than 3.5 million farmers in over 31,000 villages growing a range of crops - soybean, coffee, wheat, rice, pulses and shrimp, through 5200 kiosks across six states (Madhya Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra and Rajasthan) in India. By 2010, the e-Choupal network planned to cover over 100,000 villages, representing one sixth of rural India, and create more than 10 million e-farmers.

Encouraged by the success of the e-Choupal initiative, ITC launched ‘Choupal Sagar’ in 2004. The problems stumbled upon while setting up and managing these ‘e-Choupals’ were primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenges of making the farmers and the users of the network e-savvy in the inaccessible areas of rural India.

Receiver of the Development Gateway Award 2005, the e-Choupal initiative demonstrated that private sector can successfully achieve a balance between the conflicting goals of creating shareholder value and also fulfill the social responsibility of development and growth.

ITC’s e-Choupal initiative began by deploying technology to re-engineer procurement of soy and other crops from rural India. The e-Choupal graduated to serve as a highly profitable distribution and product design channel. The effort taught valuable lessons in rural engagement; demonstrated the magnitude of opportunity, at the same time illustrated the social and development impact of bringing global resources, practices, and better remuneration right at the doorstep of the Indian farmer.

Pedagogical Objectives:

  • To understand ITC’s e-Choupal initiative
  • To understand the rural sector of India and impact of e-commerce initiatives on the sector
  • To debate on the conflicting goals of creating shareholder value and social responsibility for a company.

Keywords : Indian Tobacco Company (ITC); Cigarette and tobacco giant; Imperial Tobacco Company of India Ltd; Innovation Management Case Study; Genesis of e-Choupal; The Sanchalak; The Samyojak; e-Choupal; e-Choupal network; Mandi System; Indial Farmers; Rural India; Indian Farmers

Contents:

  • Introduction
  • Background Note
  • Traditional Distribution System
    • Limitations of the Mandi System
  • The E-Choupal Model

    • The Pricing Mechanism
    • The Operations
    • Logistics and Distribution
  • Reaching Farmers
  • Road Ahead

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