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Itc Echoupal

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What was ITC’s motivation for creating the eChoupal?
- To achieve goal of from current $100M to $442.6M (growth)
- Business model that would bring the IBD up to speed
- To increase ITC’s margins/profits through savings, and added business, through maximizing the presence of a one-stop shop service that attract farmers
- To skip middle-level transactions/processes that complicate value chain and which introduces more costs
- To improve competitiveness and efficiency of the entire value chain so the business achieves its full potetntial
- In order for the source, the farmers to have information to understand their product in a global context so that they could plan their activites with more confidence –> Farmers make informed choices
- Answer some problems of the value chain: o Prob 1: CA or commission agents pocket the diff between the bid and selling price to ITC o Prob 2: inaccurate weighing as farmers lose an average of $2.22 per lot or 10kg o Prob 3: delayed / credit payments to farmers o Prob 4: slow transaction process / farmers have to wait o Prob 5: farmers have no choice and couldn’t turn down the offers of CAs o Prob 6: no warehouse for farmers o Prob 7: prices only discovered by farmers at the end of their growing and selling process o Prob 8: farmers did not have options and information, and was used to subsistence living
- In order to reduce cost and inefficiency, current supply chain of “village – mandi – factory” cycle had to be broken
- Incorporate technology in the age-old tradition of village choupals which is the existing culural infrastructure that had evolved in villages

What principles did it employ as it built the newly‐fashioned supply chain?
- Strongly depended on trust
- Website was simply a medium of interaction (driver of the Echoupal concept)
- No contract bound for users / no commitment – For FREE
- Farmers wild realize on their own that selling directly to ITC was the best alternative to the mandi – Let them understand and decide
- Win people in the long-run by giving them the tools
- Transparency
- For the Sanchalak – Its role was viewed as an honor and is based on integrity –appointed ones do such with utmost pride and seriousness
- Creating shareholder value with superordinate goal of creating national value

What are the old and new physical flows and information flows in the channel?
- Old went through several mediators / New one was farmers direct to ITC with interaction with Sanchalak and Samyojak
- Weighing – inaccurate as it was estimated / New one was more accurate
- Old- movement from farmers to CA to ITC/ New- everyone still involved and almost have similar functions except controlled by the new system, which minimizes inefficiencies
- Old- information was slow and based on word of mouth , and there is a lot of speculation and uncertainty / New- informed choices and decisions

What barriers did ITC face in embarking on this project?
- Competition with Mandi as a venue for trade – 50% still do business there
- Cost-related barriers- although implemented, it was only 80% of the farmers of the state
- Training and education of Sanchalak to manage the ITC Echoupals, and for the farmers to use such system
- Samyojak’s continued to operate Mandis
- Limited capacity
- Closeness of Echoupal web kiosk was still 5km away from farmers

How should ITC develop this platform for the future??
- Roll out, fix it, scale up – for the entry into other agri-related products
- To keep it sustainable, incorporate it and tie-up with the Mandi
- Make the most of the technology it provides and the existing positive structures of the Mandi to increase coverage and capacity of the program
- Make sure that all involved would still have a role so that no one was left out
- Although having a more efficient system/value chain would result to some involved to lose out on previously earned profits, increasing efficiency and competitiveness of the whole business/industry would result to more demand from the outside. This means greater revenues for the industry as a whole, to which everyone can benefit.
- Everyone can still make their living and profits as a result of the growth of the business rather than just on trying to take advantage over the other within the value chain.
- With the technology, incorporating and integrating other agriculture-based products, like aqua, wheat and coffee, can be synergized to improve total competitiveness.
- Other industries will improve and grow, which further benefit the whole system.
- Make it a total one-stop shop- where trading takes place – buy and sell. This would mean better revenues to ITC, more income to the Samyojak, savings and efficient access to supplies for farmers – to which the industry will totally benefit.
- To support costs of such system, everyone that makes money out of such should shoulder a portion of the costs. Any sustainable business is about balancing and budgeting revenues versus costs, and this should be applied to such value chain.

Sivakumar’s concerns and problems
1. Increase IBD’s business from $100M to $442.6M
2. Create a system that would the increase the efficiency of the business and reach maximum potential
3. Secure competitiveness of the entire value chain to achieve full potential
4. Seeking growth through addition of possible sources of revenue that can also contribute to the efficiency (such as selling of supplies/insurance)
5. Seeking sustainability of such system
6. Challenge of sustaining high rates of economic growth with equity over many years in order to convert economically disadvantaged people into viable customers, translating to economic freedom…...

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