The World Bank has approached ITC Ltd- the
tobacco company diversifying into fast-moving consumer goods (FMCG)- for consultancy on
replicating its rural click-and-mortar infrastructure - e-choupal- in Africa.
ITC’s e-choupals connect some 6,000
villages in India, through which ITC sources agricultural commodities for its FMCG
businesses.
Going forward, ITC intends to use the
network- which is being scaled up to connect 1 lakh villages- for distributing a wide
range of products and services.
ITC chairman Y. C. Deveshwar said the
network would emerge as a "trade, marketing and distribution superhighway",
facilitating flow of goods and services into and out of rural India. He added that the
click-and-mortar platform was being discussed in leading business schools like Harvard and
Kellogg’s, and case studies being written on it.
Speaking at Infocom- the four-day IT
conference and exhibition organised by Nasscom and Businessworld, the Ananda Bazar group
publication- Deveshwar said ITC was not in a position to co-operate with the World Bank in
setting up a similar infrastructure in Africa.
"We are not ready with it as yet. We
want to stay focused on expanding the network in India for the time being. It’s being
scaled up at a breakneck speed. We set up four choupal a day on average."
A large number of companies have already
evinced interest in using ITC’s network to penetrate the rural market.
"You can distribute a wide variety of
things through the network- insurance, microcredit, health services, fertilisers, tyres,
tractors," he added.
"The beauty of the network is in
removing wasteful intermediation, which creates value for both the buyer and the
seller."
It draws its strength from the
inaccessibility of the interiors of rural India- or "the problem of last-mile
logistics", to quote the ITC chairman.
Analysts say e-choupal has given a fillip
to ITC’s agri-business, which is growing rapidly. After a scrutiny of the network,
the Life Insurance Corporation had said: "ITC owns the farmers (where they are
present)". A number of insurance companies and banks have been eyeing the network
since.
Although ITC burnt its fingers in trading
in agricultural commodities in the mid-nineties, Deveshwar paid tribute to his
predecessors for venturing into it.
"Had they not started it, we would not
have been here."
