Developments in Rural Retailingby Udit Jain on June 21, 2007
Rural Malls: Chaupal Sagar
Chaupal Sagar is one of the first organised retail forays into the hinterland. It was soft-launched on 15 August. It is actually a warehouse for storing the farm produce that ITC buys through its e-chaupals. The mall has come up in one part of this warehouse.It has been set up by the international business division of tobacco major ITC. It has been initiated as rural shopping-cum-information centres in Madhya Pradesh. The first rural mall has come up 40-odd kilometres journey from Bhopal towards Sehore.
ITC Spent 3 years and Rs.80 crores on research and development of this concept including investments in E-choupal.
- ITC describes the establishment as a set to create a high-quality, low-cost fulfilment channel for rural India. However, any organisation is driven by the profit motive which are served through this initiative: Reap benefits from the market they have created
- Creating an entry barrier for other prospective players
ITC has very effectively integrated its profit and social motives.
KSA Technopak – “It is definitely a pioneering venture because no other Indian company has yet entered rural retailing with the all-under-one-roof concept.”
Malls stocking wide variety of products with floor space of 7000 sq.ft plus a trading zone and information centre. It is a Hub cum Supermarket, which has been set up in a section of the ITC rural warehouses.
Chaupal Sagar cannot be shoehorned into any of the existing retailing categories. At 7,000 square feet, it is too small to be a mall.
It has opted for self-service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything – from toothpastes to televisions, hair oils to motorcycles, mixer-grinders to water pumps, shirts to fertilisers… It defies pigeonholing. It is just a very sharply thought-out rural store.
Most of the brands it sells are national such as Marico, LG, Philips, torches from Eveready, shirts from ITC’s apparel business, bikes from TVS, and tractors from Eicher.
Spread over 5 acres of land at Sehore in Madhya Pradesh: –
- Rural shopping malls will be open from 6 am to 9 pm.
- Features and facilities at these ITC malls can overshadow those in the metros. The ITC store sells everything that a rural consumer may ask for – sarees to kurta-pyjamas to shirts (in the range of Rs 99-500), footwear, groceries, electronic durable from TVs to microwaves, cosmetics and other accessories, farm consumption products like seeds, fertilisers, pumps, generators and even tractors, motorcycles and scooters.
- Banking and automated teller machines will be standard at the malls.
- Insurance products for farmers.
- Entertainment facilities, restaurants, public facilities and parking space will also be available.
- There is even a fuel pump in tie-up with BPCL and a cafeteria.
- Parking lot for 160 tractors.
- There will be a primary healthcare facility to be serviced by a private healthcare service provider.
- Information centres: The company will create the facility for providing online information on commodity rates and weather.
- Shopping malls will have a training facility on modern farm techniques.
- Farmers can come and log on to the Internet and check the pricing and sell their commodities.
- There will also be godowns for storing the wheat and soybean and also for stocking products retailed at the mall.
- The business model of Chaupal Sagar is linked closely with the E-chaupal initiative of ITC.
- Role of ITC is to create infrastructure such as space, computers, and building.
- ITC will charge a fee for the services and items sold at the mall.
E-Chaupal is the backbone of these rural malls. While the first layer (E-Chaupal) provides the farmers necessary information about weather and prices, this hypermarket initiative will provide them another platform to sell their produce and purchase necessary farm and household goods under the same roof.
The e-Choupal model required that ITC to make significant investments to create and maintain its own IT network in rural India and to identify and train a local farmer to manage each e-Choupal.
E-Choupal combines a Web portal in the local language and PCs with Internet access placed in the villages to create a two-way channel between ITC and the villagers. The project started with a pilot in June 2000 in Madhya Pradesh with Soybean farmers. Currently, it covers six states, and multiple commodities like prawns, cotton and coffee with 4000 Choupals.