ITC E-CHOUPAL HBR CASE

DAVID M.UPTON & VIRGINIA A.FULLER

Swati Agarwal

Indira Priyadarsini Megha Chandrika

Anusha chitoori Harika Duggina

Initiative of ITC echoupal• Long-term economic growth can not be feasible in INDIA without

including Agriculture sector in it since most of the work force are acquainted to this.• The idea of Creative use of information technology has made ITC to

launch e-Choupal to reduce the distance between farmers and company and make them advantageous

Before ITC E-CHOUPAL: soybean procurement• Farmer’s are losing 60-70% of the potential value of crop throughout

the process flow• Farming methods followed were same as their ancestors like 50 years

back, they are risk averted with new experimentation• Involvement of CA’S in auction of the produce in mandi’s clogged the

supply chain and make reduction in profit margins for both farmers and buyers like ITC• Weight of the crop has been manipulated because of inaccuracy of

crude beam scales resulting in loss of transaction• Price offered will not be known beforehand here and farmers are not

provided with any warehouse

Inefficiencies':

Launch of website

www.soyachoupal.comInformation's Provided: 1)Best practices page 2)Crop Information 3)Market Information 4)Q+A forum 5) News page

Comparison:

1) Old static cultivation process.2) Selling through mundi.3) Fraud in weighing the

production.4) Loss suffered by farmers.5) Non transparent system

1) Continuous development in the process.

2) Selling through echoupal.3) Weighing through digital

machines.4) Highly effective.5) Completely transparent system.

Traditional Process Through echoupal

Key points which made ITC develop echoupal:

Lack of effective communication with farmers Price and quality distortions Distance from farmer &Daily price inflation Intra day price changes Constantly decreasing profit.(profit margins are low) Virtual vertical integration A social imperative

What principles did it employ as it build the newly-fashioned supply chain

No contract like bound farmers to sell to ITC once they used the Website.

The farmers could use all of the echoupal’s facilities ,soak in all the information and still choose to take his crop to the mandi.

ITC did not ask for commitment; the farmer was free to do as he wished.

Perfect usage of sanchaayak and samyojakProviding ITC Hubs where farmers can buy and sell products

What barriers did ITC face in embarking on this project• Shifting farmers from traditional method to echoupal.• They appointed the sanchaayak and transformed CA’S to samyojak• Farmers don’t have the IT knowledge and the ITC trained them• ITC provided weather forecasting for 600 villages with the help of

IMD.• According to the agricultural produce marketing act government

ordered to sell their products with in the mandi's. But ITC made government agree to their new system.

How should ITC develop this platform for the future?

• Mobile Phones vs. Computers• Information exchange between the farmer & the echoupal• eChoupal used as distribution of other products / services• Reach into poorer and more remote parts of India• Dissemination of agricultural best practices• Getting into other fields like coffee, seafood and other commodities

Learnings and recommendations Commitment beyond the market Optimum use of technology. Moving with the market changes. Effective use of man force Penetration of Choupal to other commodities