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Rural Retail retailing itc limited e choupal rajnish kumar

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Information about Rural Retail retailing itc limited e choupal rajnish kumar

Published on June 1, 2008

Author: rajnishkumar71

Source: slideshare.net

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Organised Retail in Rural India By Rajnish Kumar ITC Ltd. ISB Retail Club 8 th Sep 2007

Does Organised Retail in Rural India Make Sense? What’s Rural? Census of India defines rural as “any habitation where the population density is less than 400 / sqkm” There goes for a toss the first requirement of the ‘Organised Retail’ >>“large catchments of consumers” But there are 750 million consumers in Rural India!!

What’s Rural?

Census of India defines rural as “any habitation where the population density is less than 400 / sqkm”

There goes for a toss the first requirement of the ‘Organised Retail’ >>“large catchments of consumers”

But there are 750 million consumers in Rural India!!

Does Organised Retail in Rural India Make Sense? The Census also adds to the definition of “Rural”: “… where at least 75% of the male working population is engaged in agriculture” Sadly, the Per Capita Income of a farmer is one fourth of that of an average Indian ! That takes away another key requirement of the ‘Organised Retail’ >> “large disposable incomes”

The Census also adds to the definition of “Rural”:

“… where at least 75% of the male working population is engaged in agriculture”

Sadly, the Per Capita Income of a farmer is one fourth of that of an average Indian !

That takes away another key requirement of the ‘Organised Retail’ >> “large disposable incomes”

Distribution of Income paints an even more dismal picture

Then, What makes sense? Rural Consumers travel long distances to buy products Higher the spend, longer the travel distance…

Rural Consumers travel long distances to buy products

What else is adding up? They do buy in “bulk” 60% of grocery is bought monthly by R1 & R2

They do buy in “bulk”

And There’s More! Rural consumers seek “More Value for Money” And are very savvy at taking “tougher decisions” They have to stretch the rupee.. Rural consumers are skeptical about spurious products Especially in high impact category like farm inputs

Rural consumers seek “More Value for Money”

And are very savvy at taking “tougher decisions”

They have to stretch the rupee..

Rural consumers are skeptical about spurious products

Especially in high impact category like farm inputs

Organized Retail can deliver on both these fronts : Affordable Price Dependable Quality

Affordable Price

Dependable Quality

We can safely derive Necessary condition exists… One doesn’t need to change the shopping behavior of rural consumers But, the key sufficient condition viz. per capita income… Has to be dealt with

Necessary condition exists…

One doesn’t need to change the shopping behavior of rural consumers

But, the key sufficient condition viz. per capita income…

Has to be dealt with

Rural Incomes are Low… …because of Fragmentation – Smaller Land Holdings And, weak infrastructure (physical, social & markets) …despite Excellent resources diverse agro climatic zones, research, Irrigation Great resourcefulness hard working farmers, innovative, and risk taking

…because of

Fragmentation – Smaller Land Holdings

And, weak infrastructure (physical, social & markets)

…despite

Excellent resources

diverse agro climatic zones, research, Irrigation

Great resourcefulness

hard working farmers, innovative, and risk taking

And the Channel is Taking Advantage of that E.g. When farmer wants to sell his produce, he does not know what his produce will be priced at until he is ready to transact – miles away from his home! Price Information & transaction bundled to the detriment of the farmer, resulting in sunk costs and pressure to sell On the other hand, when he wants to buy a farm input and needs bundled Product knowledge & Price information, he doesn’t get that

E.g. When farmer wants to sell his produce, he does not know what his produce will be priced at until he is ready to transact – miles away from his home!

Price Information & transaction bundled to the detriment of the farmer, resulting in sunk costs and pressure to sell

On the other hand, when he wants to buy a farm input and needs bundled Product knowledge & Price information, he doesn’t get that

ITC eChoupal Bundles Product Knowledge and Price information while buying Agri Inputs Reverses both the transactions Unbundles Price and transaction while selling produce And Therefore raises farm incomes

Bundles Product Knowledge and Price information while buying Agri Inputs

Unbundles Price and transaction while selling produce

Having increased the size of the wallet A Format for Retailing is the next question The mandi town is an all-in-one center for the farmer / rural consumer Selling produce, buying farm inputs, buying consumer goods, health care, entertainment Alternative has to be a “One Stop Shop” format too Making it “the” destination, capturing the precious footfalls

A Format for Retailing is the next question

The mandi town is an all-in-one center for the farmer / rural consumer

Selling produce, buying farm inputs, buying consumer goods, health care, entertainment

Alternative has to be a “One Stop Shop” format too

Making it “the” destination, capturing the precious footfalls

 

 

State of Art facility for Agri produce buying

Wide Range of Product Categories

Self Service is gaining acceptance

Hygienic, Affordable Food Court…

Fuel Station

High Quality Health Services Tele link to Hospitals for Specialist advice

Pathology Lab to conduct basic tests…..

Soil Testing laboratory for customised farm inputs

And More… Banking & ATM Insurance Photography Tractor Servicing Workshop Pharmacy …

Banking & ATM

Insurance

Photography

Tractor Servicing Workshop

Pharmacy



Communicate...

Attract and Engage

Store of the community Emotional Affinity >>> Rational Benefit Relationship with the customers beyond product and price It’s my Choupal Saagar !!!

Emotional Affinity >>> Rational Benefit

Relationship with the customers beyond product and price

It’s my Choupal Saagar !!!

Fortune “at” the Bottom of the Pyramid? Sure… But, more importantly Fortune “for” the Bottom of the Pyramid too

Improving Quality of Life in Rural India Thank You

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