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E-Choupal Case

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Reaching To Underserved Consumers to Bring To Life Economic Growth
It is a fact that emerging markets will be the main contributors to the world’s economic growth. Companies around the world have seen the importance of reaching Low Income Consumers as the main source of expansion, knowing that in the long term, by improving their lives they would eventually turn into consumers with higher economic power that will be able to buy more products. One of the BRIC countries that are expected to account for almost a half of the GDP increase in the next years is India, and agriculture is a major contributor to this country’s GDP and accounts for more than have of the work force. However, these commodities markets and specifically the soybean was still very isolated and managed in the same traditional way as the farmers’ ancestors did. This led to a clear opportunity for ITC, to help improve the supply chain model where both the farmers and ITC where loosing profits, this adding up to the fact that the agricultural commodities division was behind in sales compared to other divisions of the company.
Among the inefficiencies found through the supply chain were: 1)The presence of an intermediary called the Commission Agent who performed an unfair practice by purchasing the soybean at a lower market price to then resell it at a higher price to the processors reducing its profit margin, 2) Farmers were losing money throughout the supply chain, around 60-70% of potential crop value, as they had to pay for bagging, weighting and transport even if they didn’t close the sell and they used to lose 0.5% of his original lot because of inaccurate weighting scales, 3)This instability of income turned into a risk averse attitude from the farmers where they didn’t want to invest in their current methods to get higher quality products which would turn into higher value and profits for both

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