NIDHI NATH SRINIVAS

NEW DELHI: Guess why ITC never worries about the weather? The Net is weather-proof. ITC's e-commerce initiative - e-choupal - is giving it a trading edge that competitors can only dream of. As chairman YC Deveshwar summed it up in a recent interview with ET: "ITC wants to create a high-quality low-cost fulfilment channel for rural India."

"The e-choupal was the first step in the last mile towards complete backward integration. It's also the first mile on a new information highway around which multiple suppliers and buyers can converge. It can make a huge impact on rural well-being," he said. The farm-to-factory model operates on the principle of providing crop management inputs to farmers throughout the season. Post harvest, the hub operates as a price discovery mechanism for farmers, with ITC initially as the main buyer. Consequently, while ITC's own supply chain has become more cost-effective, avoiding the mandis, farmers have access to timely information and good growing practices.

What is so special about ITC's e-choupal? It is "e-business 101" for dummies. All the basic rules that help create a successful e-commerce model are being leveraged to chop costs and boost volumes, that in turn improve revenues. "There is no guarantee that ITC will achieve its ambitious goal of expanding the e-choupal network to 100,000 villages and 10 million farmers in five years.

But, what it has achieved so far paints a tantalising picture of the possibilities of e-business for rural India. And it offers valuable insights into using creativity and pragmatism to overcome barriers in implementing e-business solutions," says Prof Mohanbir Sawhney, McCormick Tribune Professor of Technology at Northwestern University's Kellogg School of Management, in a case study of the project. Professor David Upton of Harvard's business school agrees. "It provides an excellent example of combining social goals with profitability. It demonstrates how a deep understanding of social context, along with a powerful vision can result in a stellar implementation. And it shows how everyone can win when inefficiencies are removed from a supply chain," he told ET in a recent interview.