ITC’s long-term plan is to evolve the e-choupal into a one-stop shop for farmers to take care of many different business needs. S. Sivakumar, CEO of ITC’s international business division, told me his company modeled the e-choupal on a concept I originated, which I called a metamarket. Ultimately, ITC envisions the e-choupal as an e-commerce hub for the village?a single point of contact among farmers and a wide range of suppliers of agricultural inputs and consumer products. Already, seed producers such as Monsanto and fertilizer manufacturers like Nagarjuna Fertilizers and Chemicals take orders and market their products through the e-choupal sites. Future plans include services like small business loans and insurance.

Meanwhile, ITC has maintained a role for the traditional commission brokers, who are now called samayojaks ("coordinators"). The samayojaks manage physical flows in the supply chain, such as logistics, and they collect pricing data from local auctions and maintain records.

Back to Basic Best Practices

The e-choupal initiative offers the following important lessons for any e-business initiative.

• Leverage existing assets and relationships. ITC’s tobacco and agribusiness divisions own a distribution and collection system with unparalleled reach into rural India. It also has strong relationships with farmers and intermediaries in the agricultural supply chain. These assets and relationships allowed ITC to create a unique and defensible online franchise.
• Define a clear value proposition for everyone. The e-choupal venture benefits ITC by reducing procurement costs, improving quality of produce procured and creating a lucrative information franchise. For farmers, it reduces transaction costs, gets them better prices and empowers them with information. And the sanchalaks get the opportunity to run their own business.
• Adapt solutions to the business context. ITC creatively overcame the lack of computing and communications infrastructure by creating appropriate technology solutions, including a human interface to overcome literacy and Internet access limitations.
• Reintermediate, don’t disintermediate. Instead of eliminating the middlemen, ITC redefined their role by decoupling information flows from physical flows in the supply chain. In this way, ITC mitigated any channel conflict.
• Co-opt customers in designing solutions. ITC recognized that getting farmers to adopt technology would pose a huge challenge. By recruiting the sanchalaks from within the villages, ITC was able to get buy-in from the farmers. ITC also made the sanchalaks take a public oath of office, recognizing that a social contract was far more effective than a formal contract.
• Think big, but start small. ITC’s long-term vision for e-choupal is grand. But the company started with a modest and focused value proposition?helping farmers get better prices for their crops. This phased approach allows ITC to gain credibility through early successes and to learn from its mistakes.