| ITC chairman Y. C. Deveshwar (left) and Nasscom president Kiran Karnik at Infocom 2002 in Calcutta on Tuesday. Picture by Pabitra Das
Calcutta, Dec. 3: 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 choupals 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, micro-credit, 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.”