RURAL RETAILING

The Magic of
Rural Retailing:
Report on Agri-
Retail

RURAL RETAILING

Contents
Introduction ............................................................................................................................................ 3
Indian Retail Industry .............................................................................................................................. 3
Retails Industry Market Highlights ...................................................................................................... 4
Rural India & Retailing ............................................................................................................................ 5
Issues and challenges facing agri-retailing .......................................................................................... 5
Opportunities Ahead ........................................................................................................................... 6
Porter five Forces Model Rural Retail .................................................................................................. 6
Major Rural Retails in India ..................................................................................................................... 7
Haryali Kissan Bazaar .............................................................................................................................. 9
Champion Agro ..................................................................................................................................... 14
ITC Choupal Sagar ................................................................................................................................. 18
Finances ............................................................................................................................................ 20
BENEFITS OF E-CHOUPAL .............................................................................................................. 21
CRITICAL SUCCESS FACTORS ......................................................................................................... 23
Bharti Walmart...................................................................................................................................... 24
Easy Day ............................................................................................................................................ 24
Controversies ................................................................................................................................ 25
Tata Kisan Sansar .................................................................................................................................. 29
GNFC Retail Narmada Agrimarts .................................................................................................... 34
The concept of Agri Mart .............................................................................................................. 34
Godrej Agrovet Aadhar .................................................................................................................... 39
Agrium ................................................................................................................................................... 42
Agrium Financials .......................................................................................................................... 42
Hydric Farm Inputs ................................................................................................................................ 45
Kisan Seva Kendra - IOCL ....................................................................................................................... 49
Mana Gromor Center ............................................................................................................................ 49
ICICI Bank .............................................................................................................................................. 55
Comparison of all the Retail on various factors .................................................................................... 58
Scorecard: Comparison of Retail ........................................................................................................... 60


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Introduction
The agriculture sector in India has undergone significant structural changes in the form of decrease
in share of GDP from 30 percent in 1990-91 to 14.5 percent in 2010-11 indicating a shift from the
traditional agrarian economy towards a service dominated one. This decrease in agricultures
contribution to GDP has not been accompanied by a matching reduction in the share of agriculture
in employment. About 52% of the total workforce is still employed by the farm sector which makes
more than half of the Indian population dependant on agriculture for sustenance. However,
within the rural economy, the share of income from non-farm activities has also increased. The
average size of operational holdings in India has diminished progressively from 2.28 ha in 1970-71 to
1.55 ha in 1990-91 to 1.23 ha in 2005-06.

The rural market in India is undergoing a revolution with increasing purchasing power of rural
consumers, the changing consumption patterns and increasing overall value of consumption of
goods and services. The sheer size of the rural market which has witnessed tremendous growth in
the recent years as large sections of rural population transformed into discerning consumers and
incited business interest of the top conglomerates in the country.

The key trends currently in the rural market are:
a) Rising Purchasing Power
b) Changing Infrastructural Scenario: The five year plan outlays have progressively escalated
from Rs. 140 billion in the VIIth plan to Rs. 300 billion in the VIIIth plan, and Rs. 600 billion in
the IXth plan to a mammoth Rs. 900 billion in the Xth plan
c) Government Initiatives: The government has introduced several scheme to boost the rural
economy with large investment in the form of various subsidies
d) Increased availability of financial services: Priority sector lending and increasing focus of all
banking corporates, the financial services availability has become much easier
e) Increased access to Information & Communication Technology
Indian Retail Industry
The Indian retail market is currently estimated at around $450 billion. A.T. Kearney, a global
consultancy firm has ranked India as fourth most attractive nation for retail investment among 30
emerging markets. According to Booz & Company (India) Pvt. Ltd. organized retail segment in India
accounted for only 5-6% of total retail market in 2010.
The Business Monitor International India Retail report has estimated that the total retail sales in
India will grow from US$ 411 billion in 2011 to US$ 804 billion by 2015..
Indian retail sector accounts for 22 per cent of the gross domestic product (GDP) and contributes to
8 per cent of the total employment. The sector is the second largest employer after agriculture,
employing more than 35 million people with wholesale trade generating an additional employment
to an additional 5.5 million people
According to the Indian Council for Research on International Economic Relations (ICRIER), India is
the seventh-largest retail market in the world. Indias retail market is expected to grow at 7% over
the next 10 years.

RURAL RETAILING
Unorganized retail is expected to grow at 5% and reach a size of US$ 650 billion (76%), while
organized retail is expected to grow at 25% and reach a size of US$ 200 billion by 2020 as per the
sector profile by Federation of Indian Chambers of Commerce and Industry (FICCI) the organized
retail segment in India is projected to be 9% of total retail market by 2015 and ~20% by 2020

Retails Industry Market Highlights
More than 95% of the Indian retail sector falls in the unorganized sector category. Organized retail is
expected to grow from 5-6% to 14-18 % of the total retail market by 2015, according to a McKinsey
& Company report titled The Great Indian Bazaar: Organized Retail Comes of Age in India.
The Retailer report from Ernst & Young 2009 highlights that organised retail sectors penetration
level is 85% in US, 80% in France, 66% in Japan, 20% in China and, merely 5-6% in India. This confirms
that India is at an early stage of evolution in the organised retail space and has a huge growth
potential.
Fig. 1: India Map Showing Concentration of Various urban Retailers

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Rural India & Retailing
According to National Council of Applied Economic Research (NCAER) reports, rural India is home to
830 million consumers (68%) across 640000 villages. 17 per cent of these villages account for 54 per
cent of the rural population as well as 60 percent of rural wealth. This implies that reaching out to
just 100,000 plus villages will ensure access to most of the rural opportunity. The urban market
undoubtedly continues to grow but with most of the retail initiatives concentrated in the
metropolitan and tier I and tier II cities, these markets are fast getting saturated. Realising this, most
of the big retail companies have started targeting the tier III cities and the rural towns to spur their
growth.
The bottom of the pyramid market is for sure now looking attractive for companies wanting to
explore new turf. Hariyali Kisan Bazaars (DCM) and Aadhars (Pantaloon-Godrej JV) have already
set up rural retail hubs, Choupal Sagar (ITC) has done the same and so have Kisan Sansars (Tata),
Reliance Fresh, and others such as the Naya Yug Bazaar. With several states in the country
permitting retailers to purchase produce directly from farmers, the farmers too are adapting to the
new opportunity to cultivate assigned crops and take special care of the same. This gets them
instant credit at higher prices than what they received from the erstwhile traders/middlemen.
Corporate retailers such as ITC, Godrej, Reliance, AV Birla and many others have already established
the farm linkages. Indian farmers are finally making good money, after centuries of social and
economic exploitation.
Indias rural markets offer a sea of an opportunity for the retail sector. The urban-rural split in
consumer spending stands at 9:11, with rural India accounting for 55 per cent of private retail
consumption. Currently the Indian retail market is estimated at Rs.13, 30,000 crores, and almost half
of this growing retail market at present lies in rural India, which is a tremendous growth sector that
needs to be tapped with care.
The growth of organized rural retailing in India has seen major action mainly in the Indo-Gangetic
plains consisting of the states of Uttar Pradesh, Punjab and Haryana owing mainly to the advanced
state of agriculture in these states. In the coming years the relatively wealthier southern states are
expected to be the fore runners in the growth of the rural retail industry. The eastern region has
mainly been left out of the advent of the organized rural retailing but holds immense potential if
appropriate market development efforts are made by the corporates.
Issues and challenges facing agri-retailing
Indian Agri business sector has the potential to transform India into the leading agri economy of the
world. But there are certain initial challenges that the sector has to win over such as:
Lack of distribution networks i.e. supply chain integration
Side-lining middlemen from the value chain
Difficulty in credit recovery and reluctance of farmer in approaching banks
Lack of product knowledge in the smallholder market
Low penetration of one stop-shops (due to huge capital requirement)
Inefficient buy-back system (purchase of farm output)

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Opportunities Ahead
At the same time the retailing in Agri business sector has many opportunities via.
Governments impetus to private extension services
One stop shops can act as facilitators of micro finance
New channel evolved can be used by FMCG and consumer durables
Can act as accreditation agency for certifying farmers produce
Customer database can serve as a source of genuine and readily available information
Opportunities in Rural Retail: The following matrix shows the opportunities available I various states
in India:

Porter five Forces Model Rural Retail


Threat of New Entrants
Industry
Competiti
veness
Threats of
New
Entrants
(High)
Bargaining
power of
suppliers
(High)
Bargaining
power of
Buyers
(Less)
Threats of
Substitute
(High)
Rivalry
among
Existing
Competitors
(High)

RURAL RETAILING
With the FDI being allowed in retailing will lead to more inflow of foreign investors in Indian retail
sector with enormous opportunity in rural and highly competitive urban market, this will become
the major target for companies. Thus the threat for New Entrant is High.
Bargaining Power of Suppliers
Since rural retailing would be the best place for most of the suppliers to sell their products to the
highest potential customers, hence all the suppliers want their product to be sold through these
shops and hence the Bargaining Power of Suppliers is Less
Bargaining Power of Buyers
As customers have a choice to switch to other retail or go to unorganized retail i.e. kirana shop, the
bargaining power of Buyers is High.
Threat of Substitutes
The tendency in retail is not to specialize in one good or service, but to deal in wide range of
products and services. This means what one store offers is likely to be same as that offered by
another store. Thus threat from substitutes is High.
Rivalry among Existing Customers
Retailers always face stiff competition and must fight with each other for market share and also with
unorganized sector. Currently there are less players in the rural retailing but wih FDI coming in and
huge rural potential the Rivalry among Existing Customers Would be High.
Major Rural Retails in India
Rural retail can be divided into segments: a) Agri-input retailing b) Lifestyle & other retailing Major
players in India & abroad rural retailing are:
1) Haryali Kissan Bazaar
2) Godrej Agrovet (Aadhaar)
3) Coromandel Retail (Mana Gromor Center)
4) Mahindra Subhlabh
5) Tata Kissan Sansar
6) Champion Agro
7) Bharti Walmart (Easyday)
8) Agrium Inc.
9) GNFC (Narmada Agrimart)
10) ITC Choupal Sagar
11) ICICI
12) Local Small Players (Hydric Farm, Agrimart, Indogulf, Vishwas)



RURAL RETAILING
`

Fig. 2: Comparison of Agri-Retails
COCO : Company Owned & Company Operated
GNFC : Gujarat Narmada Fertilizers Corporation
Parameters
Champion
Agro
Haryali Kissan
Bazar
Mana
Gromor
Tata Kisan
Sansar
Choupal Sagar Hydric
Godrej
Agrovet
(Aadhar)
ICICI Agrium Easyday
Narmada
Agrimart
Year of Inception
(Establishment)
2005 2002 2007 2003 2004

2003

1994 2008 2011
Owned by
Champion
Agro
DSCL
Coromandel
International
Ltd.
Tata
Chemicals
Ltd.
ITC
Treveni
Group
70% Future
Group & 30%
Goodrej
Agrovet
ICICI
Agrium
inc.
Walmart & Bharti GNFC
Geography Gujrat
UP, Rajasthan,
Punjab,
Haryana,
Chattisgarh,
Maharashtra,
MP & AP
AP, KN
Uttar
Pradesh,
Haryana &
Punjab
Madhya
Pradesh, Uttar
Pradesh,
Haryana,
Uttaranchal,
Rajasthan,
Karnataka,
Andra Pradesh,
and Kerala
UP
Maharashtra,
Gujarat,
Punjab,
Haryana,
Andhra
Pradesh, Tamil
Nadu, Orissa
and West
Bengal
All India
NA, SA &
Australia
Punjab, Haryana,
Uttar Pradesh,
Uttarakhand,
Madhya Pradesh,
Rajasthan,
Chhattisgarh, New
Delhi, Jammu &
Kashmir, Himachal
Pradesh, Karnataka
and Andhra Pradesh
Gujrat
No. of Stores 40 165 650 681 25 70 109 2900 1200 220 56
Avg. area of Store(Floor Space) 1100 sqft.
Large: 10000 -
15000 sqft.
Small: 3000 -
6000 sqft.
2000 sqft.
Min. 400
sqft.
Avg. 1000
sqft.
2-3 acres
1000
sqft.
400 sqft.

3000 sqft. 540 sqft.
Model of Operations COCO COCO COCO Franchisee COCO COCO COCO COCO COCO COCO COCO
Presence in the Agri Value Chain
Input &
Contract
Farming
Input & Output
Input &
Warehousing
Finance
Input Input & Output Input Input
Services &
Rural
Financing
Input &
Output
Consumer Goods Input
Avg. No. of villages catered by
each store
89 40 20 40 30 90 40 NA NA NA 100

RURAL RETAILING
Haryali Kissan Bazaar
Fig. 3: An outer view of the Hariyali Kisan Baazar Outlet
DCM Shriram Consolidated Ltd. (DSCL), has set up a chain of centres aimed at providing end-to-end
ground level support to the Indian farmer & thereby improving his profitability and productivity.
Hariyali Kisaan Bazaar a rural business centre is the pioneering micro level effort, which has
created a far-reaching positive impact in bringing a qualitative change and revolutionising the
farming sector in India. The Hariyali Kisaan Bazaar chain, seeks to empower the farmer by setting up
centres, which provide all encompassing solutions to farmers under one roof.
Each Hariyali Kisaan Bazaar centre operates in a catchment of about 20 kms. A typical centre caters
to agricultural land of about 50,000-70,000 acres and impacts the life of approximately 15,000
farmers. The key constraints of the Indian farming sector, being addressed by Hariyali are: Lack of
last mile delivery mechanism of modern agriculture know-how & practices, lack of availability of
critical good quality agri-inputs, middlemen driven farmer interface, high cost credit and, lack of
direct access to buyers of varied & high value crops.
Currently, Hariyali Kisan Bazaar has 165 outlets which are present in different towns in North, South
& West India in the states of Punjab, Haryana, UP, Uttarakhand, Rajasthan, MP, Andhra Pradesh and
Maharashtra.
Products & Services: The Hariyali outlets carried about 1,000 stock-keeping units (SKUs) of agri
products expressly for the rural farmer, including a wide range of multi brand, good-quality agri
inputs. The product range for HKB is as follows:
Quality inputs (fertilizers, seeds, pesticides, tools, veterinary products, animal feed, irrigation
items, diesel, petrol)
Agronomic services with teams of extension workers and agronomists providing advice to
customers
Financial products (crop insurance, credit, banking, investments, money transfers)
Consumer goods (groceries, home appliances, garments)
Access to output markets by helping farms produce buyback opportunities, commodity trading
Information (weather forecasts, market prices, farmers databases)

These outlets also provide round the year technical support to the farmers through a team of
qualified agronomists. Hariyali has been able to establish itself as a Centre of trust, reliability and
respect among the rural community. Given the market structure, consumer profile and the

RURAL RETAILING
bottlenecks in supply chain infrastructure, Hariyali outlets are taking longer than expected time to
reach the desired sales and profit levels. Hariyali has 165 outlets as on 31
st
March, 2012 spread over
6 states offering Agri, Food & Grocery, Lifestyle, and Fuel etc.
Each Hariyali Kisaan Bazaar was built on four- to five-acre campuses, which, in addition to the outlet
itself, contained a fueling station, banking facilities, farm demonstration areas, parking space, water
fountains, and green recreation zones. The outlets had approximately 12,000 square feet of walk-in
space and self-service racking. The racks were a key feature, allowing farmers to touch, feel, and
examine the products before making a choice, in contrast to the over-the-counter format of
competing mom-and-pop shops. The products on the shelves were all clearly labeled with price
tags, another novelty. According to one Hariyali outlet manager, the transparent pricing of Hariyalis
products gave the farmers a sense of trust in the Hariyali model.
Key investments in setting up a Hariyali center covered four main areas: land, construction, fixtures,
surveying; area and catchment surveys of customer demographics; prelaunch farmer outreach
programs; and training of Hariyali staff. Costs for the Hariyali outlets varied considerably depending
on the services offered. Construction costs ranged from Rs.1 million to Rs.1.5 million ($25,000
$40,000), but the fueling station, bank, and crop storage facilities added considerably. Together with
the catchment area evaluation studies and personnel training, setup costs were about Rs.20 million
Rs.30 million per location

Fig. 4: Product Profile available at Hariyali Kisan Baazar
TCS helps Hariyali Kisaan Bazaar, India implement an assortment planning application. HKB
implemented an assortment planning application (a first in India) with TCS help.
(http://www.tcs.com/offerings/technology-products/mKRISHI/Pages/default.aspx

RURAL RETAILING
http://www.tcs.com/SiteCollectionDocuments/Brochures/Innovation_Brochure_TCS_Agro_Advisory
_System_10_2010.pdf )
There were two kinds of formats that Hariyali was dealing with:
a) Retail Centre (3 4 acre)
b) Retail Store (2000 3000 sqft)
Retail Store is a smaller version of the Hariyali which only have agri-inputs and lifestyle products.
Each Hariyali outlet had about 11 salespeople across the agri-inputs and consumer goods sales
floors, one manager, and, if there was a fuel station, about 11 station attendants and one
salesperson for cooking gas. The manager and salespeople on the agri-inputs side were all trained
agronomists; the salespeople for consumer goods and fuel were hired from the local villages. Above
the store manager there were Regional Business Manager for the divided zones for looking after
sales and Area Marketing Manager for looking after the promotions part, also there will be a person
for commercial, finance and HR. Hariyalis agri-input salespeople usually held masters degrees in
agriculture.
Hierarchy: There were four tiers of management between the outlets and head office. Individual
outlet managers reported to nine territory managers, each with an office in one of the territories
covered by Hariyali. Three regional managers oversaw these territory managers, and the regional
managers reported directly to Operations Head. Farmer feedback was passed back to the head office
through this channel. Also at the head office level were category managers, who decided what
products Hariyali would provide in its outlets. In order to assure that the product mix fit with what
farmers needed or had recently requested, category managers met with territory managers
monthly. The head office was also responsible for training new outlet staff.
DSCL started the first HKB store at Delpandarva in Uttar Pradesh (UP) where it had a strong brand
image and then rolled out other stores in different parts of UP. Thereafter, it seems to be following a
focused approach of expansion into the high potential regions of the Indo- Gangetic plains consisting
of the states of Punjab and Haryana. The outlets averaged between 150 and 200 footfalls per day,
which increased to 1,000 per day at peak times in the crop cycle.
Advisory services: Hariyali employed trained agronomists who went into the fields at the farmers
request to discuss problems and recommend a range of solutions from which the farmer could
choose. Agronomists also staffed the Hariyali outlets and offered over-the-counter advice and
product recommendations.
Credit: At the pilot in Del Panderva, Hariyali had partnered with ICICI Bank, Indias largest private-
sector bank; a well-marked branch stood on the Hariyali campus and was open from 10 a.m. to 5
p.m. The bank provided services such as agricultural credit, life insurance, and general insurance. To
help address farmers seasonal cash flow problem, the bank offered an agricultural credit card for
use only at Hariyali outlets, as well as at ATM machines. About 2,500 of Del Pandervas 3,000
customers had the card. Most users had no problems in paying off the cards balance; the default
rate was 5%.
Fuel: Select Hariyali campuses had fuel stations attached in partnership with Bharat Petroleum, one
of the largest fuel providers in India. Fuel stations offered gas, diesel fuel, and cooking gas. Unlike
many local fuel outlets where gasoline was often adulterated with kerosene, Hariyali certified its fuel

RURAL RETAILING
products as unadulterated; a Pure for Sure logo was prominently displayed on Hariyali fuel
stations.
Fig. 5: Field Activity by HKB Field Associate





Fig. 6: Promotion
Literature for Hariyali
Kisan Baazar











Fig. 7: Field Activities by HKB Field Associates

RURAL RETAILING
































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Champion Agro

Established in the year 1990, Champion Agro Limited, are one of the leading manufacturers and
suppliers of agricultural irrigation system like Turbine Pumps, Submersible Pumps, Mono Block
Pumps and Electric Motors. Apart from this, we have also introduced our own retail chain of
Agribusiness centers and Agri-clinics. Operating under brand name Champion Agro World, the
chain serves farmers by facilitating their all agricultural needs as well as providing free agricultural
consultancy services that range from sowing to harvesting of crops. Thus, retail chain of Agro centers
act as one-stop-shop for meeting farmers complete needs. They currently have 40 stores in Gujarat
and plan to scale 400 centers all across India within coming 3 years.
It is an innovative effort aimed at empowering farmers and meeting the needs of rural households
by providing access to agricultural products, services and consultancy. Various products & services
available at the store are:
1) Quality inputs (fertilizers, seeds, pesticides, farm equipment, veterinary products, animal feed,
irrigation items)
2) Agronomic services with teams of extension workers and agronomists like soil testing, crop
inspection, weather forecasts etc.
3) Financial services including farm credit, life insurance, medical Insurance and crop loan, term
loan etc.
4) Access to output markets by helping farms produce buyback opportunities, commodity trading
5) Information (new development and research in agriculture, government schemes and
subsidies, market prices etc.)

Each centre caters to communities within a 25-30 km catchment and impacts the life of about
20,000 households.


The growth of the company has been phenomenal with top line of Company having grown at more
than 300% over last 2 years with a total Income of Rs.702 Million achieved in FY08 from Rs.166

RURAL RETAILING
Million in FY 06,. In 2011-12 Company clocked a turnover of Rs 430 crore and has planned a turnover
of Rs 500 crore for 2012-13. In a bid to expand its business company is planning to invest about Rs
100 crore in next two years.
Other than this, our company has also been awarded with NSIC-CRISIL Performance and Credit
Rating (SE-1A) for Small Scale Industries in the year 2009.
Fig. 8: Location of Champion Agro Stores in Gujrat
The company is also into contract farming and is a premium supplier of fresh quality produce like
mangoes, pomegranate, banana, baby corn and other farm produce. The company is presently
engaged in contract farming in 26,000 acres land spread over Saurashtra and South Gujarat. The
farming is for cotton, groundnut, cumin, sesame, wheat, bajra (pearl millet), maize, vegetables,
banana, mango, pomegranates and baby corn
Fig. 9: Champion Agro Financials

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The company is also into post-harvest management where they have invested heavily in setting up
state-of-the-art pack-house with Cold Storage having capacity of 1500 metric tons which ensures
that product is maintained at right temperature so as to retain the quality.
With the aim to provide live updates to farmers, company has recently joined hands with IFFCO
Kisan Sanchar Ltd. which is collaboration between IFFCO & Airtel, to provide regular live information
like Mandi rates, weather forecasting and other crop related information to the farmers.
Each store caters to 25-30 km of catchment area which caters to 20000 farmers; the average size of
each store is 1100 sq. ft.
Snapshot of Champion Agro
Fig. 10: Snapshot of Champion Agro Store

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Fig. 11: Precaution signage in the store and store interiors view












Fig. 12: Tally ERP in the store and finger print reader for the store & field staff attendance

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ITC Choupal Sagar
Fig. 13: Choupal Sagar Outer View
ITCs International Business Division (IBD) was Indias second-largest exporter of agricultural
products, supplying commodities and food products to international customers such as Cargill,
Marubeni, and Toepfer. In 2000, ITC launched a Web-based program for farmers to improve its
procurement operations.
ITC has set up a network of Internet kioskscalled e-Choupalsin villages that farmers could use
to access data on weather, crop conditions, best practices in farming and risk management, and,
most important international prices. Farmers used the pricing information to time their sales to
either the local market or directly to ITC at their hub locations. There are 6,400 e-Choupals covering
3.5 million farmers in 38,500 villages in eight states (Madhya Pradesh, Uttar Pradesh, Haryana,
Uttaranchal, Rajasthan, Karnataka, Andra Pradesh, and Kerala). ITC planned to extend the e-Choupal
to cover 10 million farmers across 100,000 villages in 15 Indian states.
As part of the e-Choupal initiative, in 2006 ITC set up an agricultural extension service that included
7,500 one-acre farm demonstration plots known as Choupal Pradarshan Khets (CPKs), in Uttar
Pradesh, Rajasthan, Maharashtra, and Madhya Pradesh. Farmers who signed up were charged
Rs.150 for classroom training, product literature, and five visits from agricultural experts during the
crop cycle. For an extra price, the farmers could also buy foundation seed and weather insurance,
which covered the crops against excess rainfall during the sowing, vegetative, and reproductive
phase of the crop at a premium of Rs.250. Of the 7,500 registered farmers, around 4,000 opted for
weather insurance.

RURAL RETAILING
In 2004, ITC opened its first Choupal Saagar, a rural hypermarket that provided multiple
products and services under one roof. Like Hariyali outlets, Choupal Saagars carried several brands
of items. Also like Hariyali, the Choupal Saagars offered a place where farmers could bypass
intermediaries and sell directly to the parent company, serving as the core infrastructure to support
ITCs rural distribution strategy. ITC has 24 Choupal Saagar outlets in Maharashtra, Uttar Pradesh,
and Madhya Pradesh and planned to expand to 100 outlets by 2015. One Choupal Saagar set up
caters to a cluster of 40 e-Choupals in a hub-and-spoke format. To complete the supply chain, ITC
also planned to set up 140 retail stores called Choupal Fresh in 54 towns across the country to sell
fresh fruits and vegetables. The first Choupal Fresh store opened in Hyderabad in August 2006, and
in 2007 there were four stores operating in Hyderabad and Pune.
Fig. 14: Field Days organized by Choupal Sagar Staff
E-Choupal today is the worlds largest rural digital infrastructure. Supporting the e-Choupal network
are ITCs procurement teams, handling agents and contemporary warehousing facilities across India,
enabling its Agri Business to source identity-preserved merchandise even at short notice. ITCs
processors are handpicked, reliable high quality outfits who ensure hygienic processing and modern
packaging. Strict quality control is exercised at each stage to preserve the natural flavor, taste and
aroma of the various agri products.
Fig. 15: A decorated Chaoupal Sagar in a festival

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Finances
ITCs agri-business division has generated a revenues of Rs 5,695 crore in 2011-12, internal sales for
supplying commodities to the FMCG business stood at Rs 2,282 crore. The non-cigarette FMCG
business is growing at a compounded annual rate of 40% since 2005-06. The network has also
become a big rural sales and distribution channel for ITC. The company has started to sell its FMCG
products in rural India through e-Choupal. ITC has started to monetize its e-Choupal network, which
has 20 million rural consumers according to ITC estimates (the market-led model reaches 4 million
farmers, each of whom on an average is part of a five-member household). The company is
leveraging this captive base - few marketers can boast of such a sizeable one - by offering the
platform to 160 companies who want to tap rural markets including Bayer, BASF, State Bank of India,
Bharat Petroleum, Nokia, TVS Motors, Maruti Suzuki India, Tata Motors and Monster.com; it is also
offering newer services like private healthcare and rural headhunting.
E-Choupal enables ITC to source commodities at a much lower cost than competitors. This is because
it buys directly from farmers, which eliminates intermediates and multiple handling, thereby
reducing transaction costs. The web-based e-Choupal network has now become a key driver for the
FMCG business that comprises brands like Sunfeast, Aashirvaad, Vivel and Fiama Di Wills.
The non-cigarette FMCG business pared down losses from Rs 349 crore in 2009-10 to Rs 297 crore in
2010-11 to Rs 195 crore in the last fiscal. During this period, ITC invested on its basket of brands,
with Rs 2,000 crore being pumped into the personal products and packaged foods business in fiscal
2012 alone















The e-Choupal model has required that ITC 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. The
computer, typically housed in the farmers house, is linked to the Internet via phone lines or,
Conventional Transaction vs E-Choupal
Cost Conventional Market E-Choupal
Trolley Freight
100 Nil
Filling & Weighing
70 Nil
Labour Khadi Karai
50 Nil
Handling Losses
50 Nil
Sub Total
270 Nil
Processors Incurs
Commission Agent
100 50
Cost of Bag
75 Nil
Labour (Stitching & Loading)
35 Nil
Labour at Factory
(Unloading)
35 35
Freight To Factory
250 100
Transit Losses
10 Nil
Sub Total
505 185
Grand Total 775 185
Percent of Produce Value 8% 2%

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increasingly, by a VSAT connection, and serves an average of 600 farmers in 10 surrounding villages
within about a five kilometer radius.
Each e-Choupal costs between US$3,000 and US$6,000 to set up and about US$100 per year to
maintain. A host farmer, called a sanchalak, takes care of the entire operations at the choupal. The
sanchalak benefits from increased prestige and a commission paid him for all e-Choupal
transactions. The farmers can use the computer to access daily closing prices on local mandis, as well
as to track global price trends or find information about new farming techniqueseither directly or,
because many farmers are illiterate, via the sanchalak. They also use the e-Choupal to order seed,
fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than
those available from village traders; the sanchalak
typically aggregates the village demand for these
products and transmits the order to an ITC
representative. At harvest time, ITC offers to buy
the crop directly from any farmer at the previous
days closing price; the farmer then transports his
crop to an ITC processing center, where the crop is
weighed electronically and assessed for quality.
The farmer is then paid for the crop and a
transport fee. Bonus points, which are
exchangeable for products that ITC sells, are given
for crops with quality above the norm. In this way, the e-Choupal system bypasses the government-
mandated trading mandis.
The Choupal Sagar initiative is a procurement driven effort of ITC-IBD to establish the hub-and-spoke
Choupal network at two tiers in the villages which are as follows:
1) First tier is the e-Choupal (spoke) at the village level which is located within five km distance
of all target farmers.
2) Second tier is the Choupal Sagar (hub) at the cluster level which is located within thirty km
distance of the e-choupals(a single Choupal Sagar hub caters to around forty e-Choupal
spokes)
The e-Choupal acts as the procurement centre for ITC-IBD wherein a farmer finalize his contract with
a Sanchalak (representative of ITC-IBD in the e-Choupal) for selling his agricultural produce. After
finalizing the contract a farmer carry their produce to the Choupal Sagar hubs, deposits the produce
at the warehouse and collects payments. The Choupal Sagar, which combines a procurement yard
and a warehouse with a multicategory
hypermarket, is designed to leverage the traffic of
the cash rich farmers who come to deposit their
produce at the warehouse.
BENEFITS OF E-CHOUPAL
The e-Choupal system gives farmers more control
over their choices a higher profit margin on their
crops and access to information that improves their
productivity. By providing a more transparent

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process and empowering local people as key nodes in the system. ITC increases trust and fairness.
The increase efficiencies and potential for improving crop quality contributing to making Indian
agriculture more competitive. Despite difficulties from undependable phone and electric power
infrastructure and sometimes limited hours of use, the system also links farmers and their families to
the world.
The e-Choupal model demonstrates that a large business corporation can play a major role in
recognizing rural markets and increasing the efficiency of an agricultural system, while doing so in
ways that benefit farmers and rural communities as well as shareholders. The e-Choupal model also
shows the key role of information technology provided and maintained by a corporation, but used
by local farmers-in helping bring about transparency, increased access to information and rural
transformation.
Fig. 15: Consolidate picture of ITC Agri-business Unit
The Value Chain - Farm to Factory Gate:


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CRITICAL SUCCESS FACTORS
The e-Choupal experience highlights that ICT platforms can provide rural connectivity and e-
commerce support. These platforms have enormous potential provided they are conceptualized for
the specific needs of the community and business. Some of the elements that helped the e-Choupal
to work successfully are discussed below:
a) Comprehensive knowledge of rural markets: Rural markets are both economic and social
networks and there is a strong connection between the operation of social and economic
transactions. Understanding the operations is vital before the systems are conceptualized.
Use of local population, as much as possible helped the network to get the acceptance
closely.
b) Designing a Win-Win transaction model: The success of e-Choupal comes from the
condition in which both the farmer and the processor share the benefits coming out of the
elimination of middle men and hence due to timely information availability.
c) Leveraging the logistics channels: The existing logistics of the rural markets are leveraged
but they are not able to exploit the information asymmetry (unlike that in a conventional
market). In that sense e-choupal uses the local institutions but eliminates the information
asymmetry that they used previously.
d) Selection of Sanchalak: Both the
selection of Sanchalak and the
acceptance of Sanchalak by the
community are very critical for the
success of e-Choupal. ITC used a trial
and error method for developing the
procedure for selecting Sanchalaks. In
the platform terminology Sanchalak is
the interface for maintaining the
platform. For the farmer the
Sanchalak is the e-Choupal. Training
and sensitizing him for the crucial role
has been the main reason for the
acceptance of the Sanchalak by the
farmers. Sanchalak, thus, acts as the coordinator of the knowledge community, and a
representative of farming community.
e) Evolving an appropriate user interface: The Technology interface used in rural areas has to
be very simple. Interface has to be tried for rural settings and only after its validation it has
to be used. Firstly, one has to understand the user pattern and secondly, it has to be tried,
tested and validated. For example, farmers do not understand the concept of insurance. e-
Choupal evolved a simple interfacing arrangement that a farmer can understand.
f) Bottom-up model for entrepreneurship: E-Choupal encourages enormous amount of
creativity at the local level along with local entrepreneurship stimulation. The farmer and
Sanchalak are free to use the e-choupal and develop new uses. E-Choupal unleashes the
creative spirit in the rural India.

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Bharti Walmart
Wal-Mart signed a deal with Indian distributor Bharti Enterprises Ltd. to open wholesale stores to
sell goods to small retailers, manufacturers, and farmers; in addition, Bharti planned to spend $2.5
billion to build a nationwide network of supermarkets and small stores. (Wal-Mart was forced to
partner because Indian regulations did not allow multiple-brand retailers to sell directly to
consumers; however, they could run wholesale operations.) The JV launched its first B2B wholesale
cash-and-carry store in Amritsar in May 2009.
Cash & Carry Outlets
The joint venture is establishing wholesale cash-and-carry stores and back-end supply chain
management operations in line with Government of India guidelines. Under the agreement, Bharti
and Walmart hold 50:50 stakes in Bharti Walmart Private Limited. The first Wholesale Cash-and-
carry facility named Best Price Modern Wholesale. The company have six cash-and-carry stores
(Best Price) and will have 14-15 at the end of the year, out of which about 4-5 will be in the South
and have planned another 10-12 next year. Best Price is a cash and carry operation that sells goods
from a wholesale warehouse. The format sells bulk food and consumables along with supplies
needed to operate small business operations, such as restaurants, hotels and convenience stores.
The average Best Price is 54,000 square feet.
The company has three distribution centres, one each in Chandigarh, Bangalore and Delhi. These
distribution centres (DCs) supply to stores in that region.
Offering best prices with unmatched convenience, choice, quality and hygiene, Best Price Modern
Wholesale store is a one-stop shop that meets the day-to-day needs of restaurant owners, hoteliers,
caterers, fruit and vegetable resellers, kiranas, other retail store owners, offices and institutions. The
assortment, service and store layout of Best Price Modern Wholesale store is customised to the
specific needs of business members who can walk into the store and source high quality products in
the quantities they need and at the time they require.
Best Price Modern Wholesale offers an assortment of around 6,000 items, including food and non-
food items, which are available at competitive wholesale prices, allowing retailers and business
owners to lower their cost of operations. Over 90% of these goods and services are being sourced
locally; thereby helping keep costs to a minimum, adding to the growth of the local economy and
creating job opportunities, with the cash and carry store directly employing over 150 local people.
Easy Day
Easyday is an Indian retail brand that runs chains of consumer retail department stores. The brand is
wholly owned by Bharti Enterprises Limited and is operated by its subsidiary, Bharti Retail Limited,

which is headquartered in New Delhi. The technical and management support for the brand is
provided by Arkansas, United States based Wal-Mart Stores, Inc, which is the largest retailer in the
world. Bharti Enterprises announced its foray into retail in February 2007

and the first store was
opened in Punjab, India in April 2008.
Easyday presently has 220 stores across 13 states. Those stores measured 2,500 to 4,500 sq. ft.
Easyday currently operates in 13 states - Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana,
Delhi, Uttarakhand, Uttar Pradesh, Rajasthan, Madhya Pradesh, Chhattisgarh, Maharashtra,
Karnataka and Andhra Pradesh in over 100 towns and cities catering to about 76,000 people every
day.

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There are three kinds of format stores operated by Bharti Retail; all of those have the word Easyday
in their tag name. The standard neighbourhood stores are called Easyday and have their presence
in over 190 locations; the compact hypermarkets are termed Easyday Market, which are mid-sized
stores and function in 22 marts; and large hypermarket style stores are named Easyday Hyper, with
just one store so far. The general term used for all these stores, irrespective of the store format, is
Easyday.
In addition to the merchandise sold at the regular Easyday stores, the Easyday Market stores stock a
wider range of brand and product selection. The Easyday Hyper stores follow a format of a very large
store spread over 60,000 sq. ft. and offer a further advanced, extensive range of merchandise and
goods in a capacious setup. The first and the only Easyday Hyper was launched in Mumbai in
September 2011.
Easyday sells items and products of various brands keeping in mind the requirements of the local
and regional needs. A typical Easyday store sells groceries including fresh produce inclusive of fruits,
vegetables & milk; cereals, meat, poultry, dairy and baked products, canned goods, soups, grains,
snacks, cookies, chips, condiments, beverages, sauces, spices, and candy; beauty products like
toiletries, fragrances, makeup, shaving and skincare items; health care items; apparel, hosiery, shoes
& accessories; books and stationary; toys; gifts; kitchen ware; home improvement products including
tools, lighting, & electronic accessories; and items related to religion. Easyday has also partnered
with Moneygram International that provides customers the facility of money transfer at their
stores. This facility was initially launched at 121 stores in May 2011.

Controversies

In September 2012, charges were levied on Walmart that an investment of $100 million of
convertible debentures in 2010 have been done in Bharti Retail for Easyday stores, even though, in
2010 the Indian government did not allow any foreign investments in multi-brand retail. Easyday
was accused of having received illegal investments in violation of Indias FDI laws and the Indian
government started an investigation. This also led to in internal probe by Walmart into possible
violations of the US Foreign Corrupt Practices Act, which prohibits bribery outside of the US. Bharti
Walmart suspended several senior executives as part of an internal bribery investigation.
In December 2012, reports emerged indicating that Walmart had spent $25 million over four years
to lobby the US government to gain access to overseas markets including India. The same month,
the Indian government approved an inquiry into Walmarts lobbying activities in the US amid a
heated debate in India over Walmarts plans to open retail stores in India.


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Fig. 16: Snapshot of Easy Day Stores

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Fig. 17: Snapshot of Store Interiors Promotions with Customers



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Pricing Strategy

Wal-Mart had traditionally operated on the everyday low prices model with the slogan, Always
the lowest price. However, as competitors started introducing similar low-price offers in the 1990s,
Wal-Mart gradually moved from Always the lowest price to Always low prices. As part of its
pricing strategy, Wal-Mart adopted approaches such as offering discounts of up to 10% on four key
items per category for an average of 75 days. Wal-Mart thus sold an increasing number of items
through promotions. This trend contributed to nearly US$10 billion of its sales in 2002.
The basic prices for general merchandise (except locally sourced and sold merchandise) were set
nationally. These competitive prices were based on price checks conducted in other competitor
stores every week. After doing these price checks, it was estimated that Wal-Mart, on average, was
able to offer up to 4% and, in some cases, up to 10% pricing differentials compared with its
competitors in most markets, particularly when compared with supermarkets. Food prices, on the
other hand, were determined on the basis of zones corresponding to food distribution centres. Store
managers were allowed to offer up to 5% price advantage over the best competing price in their
trading areas.



















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Tata Kisan Sansar
Tata Kisan Sansar is an initiative of Tata Chemicals Limited (TCL). Tata Kisan Sansar (TKS) was the
initiative of the Tata Group under the flagship of Tata Chemicals to provide the technological aspects
for solving Indias social and economic problems for enhancing agricultural productivity and on the
road to recover the condition of rural farmer.
Fig. 18: A Tata Kisan Sansar Outlet

Initially TKS was a separate wing of but later it was merged with dealer network under the same
employee force which has significantly affected its topline.
Empowerment
The objective of the Tata Kisan Sansar (TKS) network is to enable and empower the farmer in
creating and generating more value for farm produce by providing information on new and
improved agronomic practices and by facilitating better and more efficient use of agricultural inputs.
The philosophy behind TKS is to become a change agent for the Indian farming community.
Fig. 20: Tata Kisan Sansar Store Interiors
Structure
TKS functions as a hub and spoke model. The hub acts as a resource center to cater to the needs of

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the TKS in its vicinity. Each Resource Center supports primarily 20-25 TKS franchisee outlets called
Distribution Centre or Spoke in a radius of 50-60 km, where each TKS cater to 30-40 villages
covering approximately 13 million acres. The hubs were named as Tata Krishi Vikas Kendras the
word Vikas being synonymous with value added activities conducted like organization of farmer
meets, repository of related agriculture knowledge, soil, water and plant testing laboratory,
demonstration farms, an input storage house, and also distribution centres or spokes. The Tata Kisan
Sansars are spread across 68 districts in the North Zone and 20 districts in the East Zone spanning 4
and 3 states respectively. Presently, there are 32 hubs, which cater to 681 Tata Kisan Sansar
covering around 22,000 villages reaching out to approx. 2.7 million farmers.

Process of appointing TKS
Stores with 20 X 20 sq ft with a 150 MT godown falls under the category of being eligible for TKS, the
TKS branding is only awarded to retailers and not dealers after evaluating the credit worthiness and
image in the market. After deciding the retailer, refundable security deposit of Rs 100000 is taken
from him which is paid back after the agreement gets over with decided interest rates. A non-
transferable amount of Rs 50000 is deposited for painting and putting up the signage boards for 6
years. If dealers want they can pay more for shelves and counter design. All the business for one
year would be cash business and after a year it is reviewed for deciding the credit amount to be
given to the retailer based on the last year turnover and its business portfolio.
Benefits
TKS provides the following Access to expert advice: There are more than 60 agronomists available at
the hubs to provide advice on crops and farming issues. There are more than 150 organisers at the
TKS level.



RURAL RETAILING

Inputs: TKS centres provide generic as well as store brands of
Fertilizers: Urea, DAP, MOP, NPK, etc.
Specialty Fertilizers: Zinc Sulphate, Boron, Micronutrients, Calcium nitrate, organics, water
soluble fertilizers
Seeds: Field Crops, Vegetable Crops
Pesticides
Cattle Feed
Farm Implements
Training; In nutrients & Pest Management

Services:
Soil & Water Testing
Contract Farming
Seed Production
Application Services
Advisory Services

Relationship building:
Farmer Membership (Individual & Group)
Accident Insurance to Members
Farmer Meet
Membership criteria of Tata Kisan Parivar (TKP):
In Tata Kisan Sansar there is a provision of having membership of farmers. These member farmers
have created an association called Tata Kisan Parivar (family). The Tata Kisan Parivar Membership
Program is unique affiliation based initiative intended to facilitate participation of the most
important stake holder in the value chain. The membership is voluntary and renewable in each and
every year with a nominal cost of Rs.115 per annum.
Fig. 21: Dealer cum TKS Retail Center


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These members are enjoying a host of benefits include:
i. Free Soil Testing before cropping season
ii. Accidental Insurance of upto Rs. 1 Lakh
iii. Educational trips organized by TCL to various information platforms like crop
visits, demo farm visits etc.,
iv. Free Subscription to the TKS quarterly magazine the TKS Patrika (magazine)
v. Annual TKS diary
vi. Exclusive Membership Card
vii. Exposure to various forums for disseminating and gathering information like crop
seminars, Kisan Melas (Farmers fair), Agri Exhibition set

Fig. 22: Various Field Activities undertaken by TKS
Tata Chemicals with the objective of providing the farmers high quality services, providing them with
healthier crops, higher yields and enhanced incomes mooted the idea to use high-end technology to
achieve its ultimate goal of Improving the quality of Life of the farmers. Tata Kisan Sansar
introduced the concept of precision farming, with an idea to catapult the rural India from the age of
bullock cart into the new age of satellites and information technology.
The concept involved designing and implementing an ICT platform through which the farmers could
access markets, access information and access expertise. The value addition comes through the use
of GIS, along with other on-line services, specially designed to meet of the farmers needs. The GIS
technology helps the farmer to adapt quickly to the changing conditions in the soil and climate. The

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operation involves combining satellite maps, census data, socio-economic and other data collected
within the GIS. The aim was to create a value-added agricultural database.
The Tata Kisan Sansar precision-farming concept uses GIS to manage and analyse data collected
from different sources by various means, sophisticated and simple. The information thus collected
includes census data, revenue data, socio-economic surveys, satellite imagery, soil-mapping data
and market studies. The agronomist at the stores uses analysed information on topography, soils,
climate, hydrology, cropping systems and crop suitability to advise farmers on which crops to grow,
crop management, market trends, what kind of fertilizers to use and how much, etc. The goal is to
maximize the yield from a farmers land holding, and thereby improve his socioeconomic standing.
Collecting and converting the data from various sources into useful information is a complex, time-
consuming task.
The total turnover of Tata Chemicals is Rs 13973 crores in 2011-12 with a PAT of Rs 837 crores
compared to last 2010-11 turnover of Rs 11102 crores and a PAT of Rs 653 crores.



















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GNFC Retail Narmada Agrimarts

GNFC has decided to establish three tier agriculture service outlets named Narmada Agri Mart,
which will provide a one stop solution to farmers for their all requirements. It will offer best quality
Agri inputs at competitive prices with add-on services like linking to Soil Testing, Govt. Schemes,
Bank Credits, Farmers Training and technological development and Agri Consultation at village level
only.
It will also guard them from unjustified losses due to low quality/duplicate inputs or retailers
monopoly and help farmers in advance planning of seasonal cultivation. Currently, three Narmada
Agrimarts have been started at Hansot, Jhagadiya and Vyara Talukas of South Gujarat and 12 cluster
level outlets are established. Around 20 Village level Farmers Meetings have been conducted and
50,000 farmers have been contacted so far as a part of the field level activities
The concept of setting up Agri Marts at the village level is to provide various inputs and services
to the farmers under a single umbrella. Gujarat Narmada Valley Fertilizers Co. Ltd., (GNFC) has
taken a lead in developing such a project for the farmers in Gujarat and other States.
GNFC presently runs 56 outlets in Gujarat which are called Narmada Khedut Sahay Kendra (NKSK)
and each of these centres are headed by an agricultural graduate and these centres are well
received by farmers.
The concept of Agri Mart
It is proposed to establish 3- Tier retail agri marketing structures in 300 selected districts in next few
years, either directly by GNFC or by an entity promoted by it, which can focus exclusively on the
farmers essential needs.
(A) CLUSTER LEVEL OUTLETS

The invidual cluster level outlets (CLO) will cover 5000 farmers and will be manned by a trained
professional. The CLO will not store any input and will basically act as a facilitator to contact farmers,
provide information, display various products, provide extension services, identify credit
requirements of farmers, book the input requirements of farmers in advance, pass the indents to the
taluka level Agri Marts, and ensure its timely supply. These outlets will be linked with the Block level
Agri Marts which will store the inputs and supply them to farmers as per the indent. Such a contact

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centre based will considerably reduce the inventory management cost of the inputs, thereby
reducing the retail prices of inputs and services.
CLO will also develop the data base of every farmer of the area in order to assess their seasonal
input requirements. Same data base will also be used for arranging timely credits, linkages with
micro-irrigation, protected cultivation, Government subsidies and formal credit for the eligible
farmers. Every outlet will be supported by an internet enabled computer and GIS enabled mobile so
that the quality of services and their delivery to the farmers can be monitored effectively without
significant monitoring cost. Each CLO is expected to cover every farmer of its area. The CLO
functionary will be a pre-trained local youth who will be paid on the basis of his outputs and the
outlet will be located in a rented premises. In due course, the same premises can also be used for
setting up an ATM.
CLO functionary is expected to periodically visit the farmers taking up a new crop and provide
required advice to him, take soil sample, bar code and send it to the central soil testing lab, take
samples of plants for disease control and intimate farmers about new products and existing
Government schemes. He will also assist the farmers in completing various formalities for assessing
various subsidized schemes, farm credit, etc.
(B) BLOCK LEVEL AGRI MARTS

Agri Mart will be the main functional unit and will be responsible for the whole Block and the CLO
falling within its jurisdiction. The Block level Agri Mart (BAM) will have facilities to stock fertilizers,
seeds, pesticides, agricultural implements and saplings. It will have a godown for temporary stocking
of inputs, a greenhouse for storage and hardening of saplings including tissue culture products, and
an outlet. The outlet and warehouse can be located at different locations. It will also supervise
various freelance mechanics that will provide their services for installation and servicing of minor
irrigation devices, green houses, tractors and irrigation pumps. The quality and scope of services to
be provided by these mechanics will be predefined by the Project. Quality of their services will be
assessed periodically.
Individual Agri Marts will be equipped with toilets, water cooler, training room with TV & DVD and a
camera. They will be linked with the Central Office through CCTV camera and internet.
(C) DISTRICT LEVEL MEGA MARTS

Mega Marts at district level will offer every input and service required by the farmers of the district.
It will also arrange tractors, farm implements, their servicing, all other inputs available at the Agri
Marts. Some of the designated Mega Marts (DMM) will have a state of art soil testing and quality
control laboratory. One location will also have central agriculture training institute, which will
develop standard operating procedure, service quality norms, IEC material in simple language and
besides this, will select, train and monitor the quality of the performance of the field level workers
and other freelance service providers.
The district in-charge will be responsible for local co-ordination with banks, district administration,
dealers & suppliers, monitoring and accounts keeping.
Some of the core philosophy of the present initiative will be as follows-

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(a) Farmers should be able to receive required inputs and services as per their requirement, in
assured manner, as per their timings and at a competitive price. The quality of services should be
well defined and of a very high quality.
(b) The Project will follow a saturation approach which will entail covering maximum possible
number of farmers, which will increase bargaining power during procurement.
(c) In order to further reduce the cost of inputs, Project will try to drastically reduce the inventory
maintenance cost. The effort will be to work with close to zero inventories, which will be made
possible by heavy reliance to technology for agglomerating the demand, inventory management
software, just-in-time procurement encouraging advance booking of requirements by farmers,
etc.
(d) Farmers should receive one-stop solution from the nearer cluster level outlets. However, for high
value and one time purchases, they can approach the Block or District level outlets.
(e) Price incentives and discounts will be offered to the farmers who opt for e-booking for their
future requirements, work through farmers groups to consolidate their requirements and
delivery size, frequent purchases through the Agri Marts (loyalty bonus) or take the delivery from
block level godowns. For this purpose the farmers can become member of the programme which
will also facilitate frequent contact, dissemination of information to them directly and provision
of crop advisory services.
(f) The farmers should have a choice of inputs. For this purpose, the outlets should be able to
provide a range of competitive products at the best prices.
IT Infrastructure

GNFC has a successful IT Division, called (n) Code, which is national level leader in providing and
designing security system, data centre, e-tendering, e-auction and digital signature. Services of (n)
Code will be obtained to develop the inventory management system, bar coding system for soil &
plant samples, help line, visual monitoring of outlets through CCTV system, e-auction system for sale
of farm produce, etc. It will also provide GIS based technical services to the farmers for land and
water resources development, accurate monitoring of cropping and extension services, etc.

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Range of Services available at various Levels

Business Model of a center:
1) BDO (Business Development Officer) - One BDO will take of either 1 or 2 centers. He will be
generally dealing with big customers and also helps TFE whenever they face problems at the
field level.
2) Center Manager/Center Head- One for each center. He will be generally taking care of the
center, but sometimes he will accompany TFE or CSR and helps in pushing sales
3) CSR (Center Sales Representative) - One for each center. Technically sound about all the
products available in the store, handles all the activities of sales. TFE will report to CSR daily.
4) TFE (Technical Field Executive) - 4 to 5 nos for each store. Each TFE will handle 8- 10
villages, as of now CHAMPION AGRO is having around 30-35 customers within each village.
Each center will cover about 50-80 villages depending on the no. of Field Executives.
Sales generated by individual TFE are recorded and they will be incentivized based on the sales per
month.
In a unique initiative, the company has also installed, for the first time in India, a fertiliser
vending machine at Jhagadia, from where farmers can buy fertilisers. It is not yet
commercialized.

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Fig. 22: Fertilizer Vending Machine introduced by GNFC but not yet commercialized

NABARD has also shown keen interest in vending machine initiative and has shown willingness to
install five to four such vending machines in time to come.
The company will have all the Taluka level outlets on rent, for which Rs. 10 lakh of investment would
be required, while for cluster level outlet the investment would be around Rs. 20000.
Finances
The total sales turnover for GNFC for 2011-12 was Rs. 386201 Lakhs with a PAT of Rs. 28384 Lakhs
against a turnover of Rs. 284589 Lakhs with a PAT of Rs. 26653 Lakhs in 2010-11.













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Godrej Agrovet Aadhar

Godrej Agrovet Limited (GAVL) is a diversified agribusiness company dedicated to improving the
productivity of Indian farmers by innovating products and services that sustainably increase crop and
livestock yields. With FY2011-12 sales of Rs. 2439 crores, GAVL has interests in animal feed, oil palm
plantations, agri-inputs and poultry.
Fig. 23: Aadhar Outlet
The Agri-Inputs business is a niche player in innovative agrochemicals, with strong market share in
plant growth promoters, soil conditioners, and cotton herbicides. Godrej Agrovet has 45
manufacturing facilities across India, a network of ~10,000 rural distributors/dealers, and over 1900
employees.
Company a has opened its retail stores selling both agri & lifestyle products, the company expects to
develop around Rs 4,000 crore business through this format in the near future.
Aadhaar Wholesale is first step toward the rural distribution model, offering small general traders
everything they need to run their business under one roof and enabling them to participate in
modern distribution infrastructure to grow their business. The group plans to have many more such
Aadhaar Wholesale stores to further strengthen rural modern trade infrastructure and thereby
contribute to the development of the local economy, he said.
Aadhaar Wholesale has 1,500 stock-keeping units or products, including processed food, personal
and home care, general merchandise items and kitchen appliances. At present, the group operates
60 Aadhaar retail outlets in rural locations across the country in partnership with the Godrej Group.
Aadhaar stores, empowers the farmer by providing all solutions to them under one roof. Over the
years through our various agri-businesses we have developed extensive working relationship and
knowledge about the farmers.

Agri business offerings comprise of complete range of good quality, multi-brand agri inputs like
fertilizers, seeds, pesticides, farm implements & tools, veterinary products, animal feed, irrigation
items. All the agri business activities are supported by a strong specialized team at each store. Store
teams members go to the farmers field, discuss the problems of farmers, advise them support them
& provide consultancy to them on issues regarding farming.

RURAL RETAILING

Godrej Agrovet has a hub & spoke for its centers, the hubs would cover about 10,000 sq ft and
spokes 3,000 sq ft, each costing about Rs 75 lakh and Rs 30 lakh respectively. The stress will be on
agro products like seeds, pesticides and fertilizers with wide range of food, grocery, apparel,
footwear, home appliances, furniture, kitchen appliances and hardware. These hub-n-spoke centres
provide technical consultancy to farmers on all aspects of farm management, including soil micro-
nutrient analyses. A host of services such as banking, insurance, pharmacy, postal and petrol pumps
have also been planned to make Aadhaar a destination point for all conveniences. Recently Godrej
Aadhaar had signed an understanding with Apollo Pharmacy, part of the Apollo Hospitals group and
Indias largest retail pharmacy chain, to pilot medicine support via Apollo Aadhaar Pharmacys, now
located at select Aadhaar outlets in rural India.
Fig. 24: Agri department in Aadhar Retail Outlet

Godrej Aadhaar as a brand, initiated to strengthen the age old relation with the Indian farmer, has
grown to a chain of 27 centres across the country, providing a host of services and facilities to the
rural population.

The new format stores sprawl over an area of around 6500 sq.ft. at Kamrej and 3000 sq.ft at Kim.
These stores not only offer complete agricultural solutions and products for the farmers but also a
wide range of commodities including food, grocery, apparel, footwear, home appliances, furniture,
kitchenware and hardware for the daily requirements of the farmer and his family.
The Aadhaar models innovation lies in its unique capability led empowerment process of the
Indian farmer to sustain an improved productivity cycle.
Aadhaar developed best practices programs for different crops grown in its region of operations,
approaches individual farmers and advises them to implement these programs based on scientific

RURAL RETAILING
methods like soil micronutrients analysis, seeds, integrated fertilizer management and proper usage
of pesticides. Aadhaars technical work force and infrastructural facilities like soil and water testing
labs facilitate the delivery of these practices to farmers.
Fig. 25: Labelling on the shelf in Aadhar outlets

Positioned as Godrej Aadhaar Khushiyon Ka, Khushhali Ka, the uniqueness of these new format
stores lies in their ability to touch the lives of the Indian farmers, their families and their
communities by offering great value propositions all under one roof. Thus, the new format stores
mark the beginning of a chain which shall form the farmers Aadhaar for Unnati, Ghar Sansar and
Gaon, a move from being just a Complete Agricultural Solution Provider to being a multi category
retail outlet with wide range of products and services housing a fair mix of brands and private labels.
Fig. 25: A smaller version of Aadhar Outlets

Presently there are 27 Aadhaar Centres across the country in the States of Maharashtra, Gujarat,
Punjab, West Bengal, Haryana, Orissa, Tamil Nadu and Andhra Pradesh. Agricultural commodities
contribute a whole 54 percent to total sales of Aadhar, while grocery contributes 17.2 percent,
FMCG products contribute 13.6 percent and consumer durables and apparels contribute 7.4 percent
and 4.9 percent respectively.

RURAL RETAILING

Agrium
Agrium is a global producer and marketer of agricultural nutrients, industrial products and specialty
fertilizers, and a major retail supplier of agricultural products and services in both North and South
merica. The Canadian based agrochemical group operates and reports its business through three
major operating segments: Retail; Wholesale; and Agrium Advanced Technologies.
Agrium is the the largest global Agri-retailer with approximately 1,250 retail stores facilities in NA,
SA & Australia with a total turnover of USD 15470 Million and Retail turnover of USD 10316
Million. They have over 900 retail facilities in North America, over 50 retail facilities in South
America and more than 300 company-owned locations and points of sale in Australia. Agrium has
long-term competitive advantages with huge product and geographic diversity, extensive
distribution capability & high Asset Utilization Rates. Agrium is the world leader in the innovative
controlled release fertilizer and is a 3
rd
leading producer of nutrients with a capacity of 9 million
tonnes. Agrium is also the global largest distributor of fertilizer with 10 million tonnes per year.
Agriums strategy is to grow through incremental expansion of its existing operations and
acquisitions as well as the development, commercialisation and marketing of new products and
international opportunities. It has been transformed over the past few years to a more stable and
diversified earnings profile.
Agrium is the only publicly traded (Traded at Toronto & New York stock exchange) fertilizer and
agricultural retail company that are involved across the entire agricultural value chain. The
acquisition of United Agri Products (UAP) is claimed to create the largest North American retailer of
crop inputs and services, increasing the scale and size of its business and significantly expanding its
geographic base and its product offerings.
Agrium Financials



Agrium grows through incremental expansion of its existing operations and acquisitions; it has made
242 acquisitions in last 5 years which contribute $95 million to EBITDA/annum. They have strong
Backend operations with strong hold in Technology and innovation, a leading producer of nutrients
with 9 MMT Capacity. The following diagram shows various manufacturing unit and offices of
Agrium in the world.

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Fig. 26: Production Units & other storage facilities of Agrium

Retail business unit demonstrated significant growth in 2011, with sales increasing by 48 Percent to
reach a record $10.3-billion and EBITDA increasing by 47 Percent to reach a record $769-million.
Agrium leverage the scale of retail chain to minimize costs, to grow sales of proprietary products and
to adopt appropriate technologies to more effectively serve our customers.
Fig. 27: Retail Store spread of Agrium




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Small tuck-in acquisitions are key component of Agriums retail growth strategy as can be seen
below:

Some of the strengths of Agrium are:
Strong Supply Chain
Economies of scale
Financial Leverage
Innovation through AAT
Pricing Power of supplier and customer
Customer loyalty due to continuous service to farmers
Unique Products & Niche Brands

Fig.: 28: Various Acquisitions done by Agrium



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Hydric Farm Inputs
Hydric Farm Inputs was incorporated in 2003 as a Public ltd. Company. It has started retail centers in
UP & Haryana under the name Khushali Krishi Kendras (KKK) which are one stop shop for all agri
inputs. The oobjective is to enable & empower farmers.
Fig. 29: Khushali Bazaar Outlets
The vision and mission of the company:
Vision: To be recognized as the most respected Company that best understands and satisfies
the product and services needs of the Farming community in the field of agriculture
Mission: Khushalis Mission is to empower the farmers with technology driven products and
make available value for money products/services for enhancing productivity through
customer-oriented delivery system with the goal of making the farmers KHUSHAL (Prosper)
All stores operate on COCO(Company owned company operated) model with the store area ranging
from 800 square feet to 2000 square feet, most of the store is of 1000 square feet. Most of the place
Godown and store are attached. The storage area of Godowns varies from 300 square feet to 1000
square feet. Most of Godowns are lower than 500 square feet.
Their stores can be categorized into three types depending upon its location:
Stores in HP- Petrol pump Premises
Stores in Mandi Parisar (Whole sale Grain Market)
Stores in Rented premises
Fig. 29: Khushahali Centre leased permises


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Fig. 30: Khushhali centre in Sultanpur Mandi (Stores in mandi are more successful and do better business)
Each Khushhali Kendra has 4 staff on company pay roll:
Centre in charge: - In general agri consultant gets promoted as centre in charge. To
be centre in charge field experience in Agri input is must
Agri Consultant :- He is equivalent to F.A. of coromandel
Store Accountant:- (Equivalent to R.S.A. in our MGCs)
Helper :- (Equivalent to C.S.A. in our MGCs)


Fig. 31: Khushali Stores interiors & Exterior View
It functions as a Hub & Spoke model and caters to about 80 to 100 villages. The whole network
caters to more than 2 lakh villages. They also have membership for loyal members, offer loyalty
point on each purchase which gets updated on loyalty book and gets redemption. They are very
strong in central UP & also have good hold in eastern UP.


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Fig. 32: Chart showing various products & Services offered by the stores

Fertilizer business of Hydric is very small. Each store sells around 200 to 300 MT fertilizers in a year.
They sell fertilizer on MRP which gives them good name but supply is their main constraint. Their
godowns is also less (only 30-50 MT) which is yet another bottleneck they have to address.
Typical a store sells 15 lakh to 75 lakh of pesticide in a year depending upon store location and
market. The best thing about pesticide is that they tend to keep minimum inventory at the store and
they dont keep more than 10-12 molecules which sometimes results in farmer dissatisfaction.
They sell Hybrid as well as Open pollinated seed of Paddy and other crop and are also in subsidy
business of paddy. Typically stores sell 8-30 lakhs worth of seeds.
They sell various PGRs, some of them are a) Sea weed extract (Soil Applicant) b) Auxin and Cytokinin
mixture c) Amino acids. They also sell organic fertilizer of only Coromandel brand.
Promotions
Field Visit and Individual contact are two main promotion activities which are conducted by them.
Kisan Ghosthies (Farmers meetings) are organized at every Khushali centre: Experts from the
relevant fields are roped in to brief farmers on crop specific new practices and addresses crop
related problems being faced by farmers.
Kushhali patrika which is a kind of agri advisory to farmer is distributed among farmers quarterly.
Recently they have launched voice SMS for big farmers of their catchment area. They don't have any
soil testing facilities. Special seminars are organized on the topics of interest suggested by farmers.
Farmers are taken on tours to agricultural universities and research stations to make them aware of
the latest scientific techniques also regular visit of Agronomist to farmers fields helps in addressing
problems in crop on the spot followed by communication through SMSs.

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Organize free medical camps & various vocational training programs, the effort has been to bring
economic freedom to the rural families. Solar lanterns promoted by KHUSHALI are finding favours
with farming community. KHUSHALI centres hold KISAN Melas (FAIR) which provides an excellent
platform for interface between various channel partners & the farming community.










Fig. 33: Monthly Magazine & Customer Care Number for Khushali
Collaborations
UP Mandi Parishad for setting up Khushali Kendra at various Mandies
HPCL, a Fortune 500 compnay, for joint development of Khushali Kendras
ASI, USA for facilitating implementation of SUNHARA INDIA PROJECT funded by BILL &
MELINDA GATES FOUNDATION in UP
Janhit Foundation for providing quality inputs & technical expertise to their SHGs & also
carrying out GAP analysis of farming practices in their area of operation


















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Kisan Seva Kendra - IOCL



Kisan Seva Kendra is an award-winning retail outlet model pioneered by IndianOil to cater to the
needs of customers in the rural segment. Today, KSK outlets have emerged as dominant players in
the rural markets, riding on the rapid growth of upcoming second and third tier roads in the rural
areas. The KSK come with a fresh perspective enabling dealers to tap the huge demand driven in by
consumers there. In addition, non-fuel retail facilities like convenience stores have been added to
the KSK to sell pesticides, vegetables, banking products and stationery items. IndianOil has tied up
with Indo-Gulf for fertilisers, National Seeds Corporation for marketing seeds and agricultural inputs
as well as alliances with Nabard, Oriental Bank of Commerce and Bank of Baroda for banking
products. Some KSK have installed internet kiosks, communication facilities, etc. Business alliances
have been signed to market products from Dabur, Airtel, Tata Chemicals, Godavari Fertilisers,
Gokulam Fertilisers, Hindustan Unilever and Godrej Agrovet. Other alliance partners are Emami for
personal care products, Money Gram for money transfer, MILMA and OMFED for milk products, and
Supplyco for convenience stores.

Mana Gromor Center
Mana Gromor center (Nama Gromor Centers in Karnataka) was started in the year 2007 by
Coromandel International Limited with the following objectives:
a) To develop viable alternative distribution channel so as to reduce dependence on dealer
network
b) To capture the opportunities in rural areas for providing one stop shop for all agri-inputs
c) To develop the concept of providing convenience, reliability and experience as main
offerings to the rural customers
d) To supply products and solutions in order to improve the earning capabilities of the
farmers and thereby improve their lifestyles
e) Enter into procurement and marketing of farm produce

Retail Model

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Each center covers 20-30 villages having 5,000 farm families in the radius of 20 km and will offer
package of products and services. This model envisages repetitive interaction between center and
the farmer with primary focus to supply Agri inputs and service. 2-3 Field Assistants called FSA
(Field Service Associate) cover the villages daily.
Company has total 650 stores in Andhra Pradesh and Karnataka, with 550 stores in Andhra Pradesh
and 100 stores in Karnataka. The average area of the stores is 1200 sq. ft. with a min of 550 sq. ft.
and a max of 2400 sq. ft. The slab analysis for store area is as follows:
Store Size (Sq. Ft.) No. of Stores
Less Than Equal to 500 50
500 to 1000 161
1000 to 1500 76
1500 to 2000 89
2000 to 2500 134
2500 to 3000 92
3000 to 3500 22
3500 to 5400 14

The company started operations in Andhra Pradesh by dividing it into six different zones i.e.
Warangal, Hyderabad, Kurnool, Guntur, Vizag & Vijayawada, later they expanded to Karnataka with
three zones i.e. Bellary, Raichur & Bangalore. Recently the company has re-distributed the retail
territories to 4 zones in Andhra Pradesh i.e. Warangal, Vizag, Vijayawada & Kurnool and 2 zones in
Karnataka i.e. Raichur & Bangalore.
The company has chosen Andhra Pradesh to start its operations because of its huge potential. Some
of the important facts about Andhra Pradesh are:
Andhra Pradesh is the fifth largest state in the country both in area and population. The state has
23 districts classified under 3 regions, viz. Telangana (10 districts), Coastal (9 districts) and
Rayalaseema (4 districts). Except Hyderabad, all remaining 22 districts are categorised as rural
Districts. The State has 1112 mandals with 26586 villages.

The state can be divided into three distinct physical regions. The coastal plains, which consist of the
best agricultural lands, covers about 35% of the area and comprises reverine and coastal alluvial and
red soils with the altitude rising upto 150m above mean sea level. The peninsular plateau covers
52% of the area and lies within an altitude of 150-600m.
It comprises numerous hills, seasonal streams and tanks. The Eastern Ghats account for 13% of the
area, with altitudes ranging between 600 to 900 m and covered by forests and a series of broken
hills and ridges. Agriculture contributes 12.9% of the State GDP and employs 62% of the total
workforce. The net sown area is 37% of the total Geographic area (compared to the National
average of 46%). The Gross cropped area is 123 lakh ha with a cropping intensity of 122. Small and
marginal farmers account for 83% of land holdings and 46% of operated area. Irrigation covers 35%
of the net sown area while the remaining 65% of the net sown area is rainfed.

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Fig. 34: Mana Gromor Center outer view
Fig. 35: Mana Gromor Center inner view


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Mana Gromor offers following products & Services:

Fig. 36: Various Marketing Activities by MGC
What does Mana Gromor Centers Offers?

The total area of the stores are about 2, 85,000 sq. ft. and is still growing with a direct reach to 22
lakhs farmer and 100,000 loyalty card holders. Stores see a total footfall of 50,000 farmers per day.
They have a cumulative storage capacity of more than 100,000 metric tons. All the stores are
connected through Microsoft Navision and with a strong backbone of SAP. The Mana Gromor
Products
Fertilizers
Specialties
Pesticides
Organic Fertilizer
Seed
Veterinary
Farm Implements
Services
Insurance
Membership
Soil Testing
Advisory
Field Demos
Precision Farming
Training & Crop
Seminars

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Centers conducts 600 demos though out the year, they have fleet have 16 AV vans for focused
promotions and also conduct more than 400 farmer meetings per week.
Mana Gromor - The Brand
Mana Gromor was ranked among the top 5 retailers in India by MSN with a Brand Equity Index of 5
(BEI more than 3 is considered ass strong brands)

New Marketing Initiatives
Coromandel Retail started new marketing initiative to reach farmers and increase awareness by
introducing Palmtops for the field staff and also the Webinar i.e. delivering technical advice to
farmers by reputed scientists through Webcasting.













Coromandel has plans to roll out to 1000 stores at the end of 2014-15 through geographical
expansion to Maharashtra, Tamilnadu, Orissa & expanding in Karnataka.

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Fig. 37: Mana Gromor Coverage in Andhra Pradesh




















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The operations team hierarchy for Mana Gromor Center is as below:

The Category heads who sits at the head office is responsible for the continuous supply of the
respective products and also responsible for new product development.
ICICI Bank
The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated in 1955 at
the initiative of the World Bank, the Government of India and representatives of Indian industry,
with the objective of creating a development financial institution for providing medium-term and
long-term project financing to Indian businesses.
Bank of Madura Limited amalgamated with ICICI Bank in an all-stock deal in 2001.After the Bank of
Madura merged with ICICI bank; they identified three areas as the growth sectors: international,
urban retail & rural retail.
ICICI Bank has designed and implemented a very innovative and apparently effective strategy to
enter the micro-finance market, despite the fact that the Bank has only 88 branches outside the
major cities. The partnership model enables the Bank to use the expertise and networks of specialist
institutions with long experience of social and financial intermediation, without taking on the risk of
actually lending money to them. Many of these institutions are financially weak, poorly capitalized,
and dependent on grant funds for their survival. ICICI is lending direct to SHGs or to individual
micro-borrowers, whose aggregated credit risks have been shown to be very low. The intermediary
institutions provide their services for a fee, which is bundled with the interest paid by the final
borrowers.
The Self Help Group Model:
Affinity group of 10-20 members
Weekly group meetings
Leader elected by group members
Small and regular savings
Group has a savings bank account operated by group representative

RURAL RETAILING
Internal lending to members from own savings
External loan to the Group as a whole
Disbursement of loans to members at the discretion of group

From the MFI perspective, the
linkage model has some
disadvantages. The MFIs are
simply loan agents; they do not
want their SHGs to become
entirely dependent on ICICI Bank.
Some MFIs are becoming
financially stronger and some are
already able to borrow bulk
funds direct from ICICI Banks
competitors, such as ABN-AMRO
Bank and others. It is likely that
in the future many of ICICI Banks
best collaborators, and particularly those taking the larger sums, will prefer to take bulk loans
themselves and to on-lend to their SHGs, thus enhancing their own status in the eyes of their clients.
The ICICI Bank linkage will help them to do this, since ICICI approved MFIs gain status by being
associated with the Bank, and the MFIs can use this to court other banks for bulk loans, in essence
diversifying their partner base. Other MFIs, as has already been pointed out, may prefer to focus on
their agency role, and to withdraw from direct financial intermediation.
ICICIs strategy is working well for the Bank also. The portfolio is growing, and the loans are
profitable. By March 2005 ICICI Banks exposure to the microfinance sector, through 27 partner
MFIs, had reached $66 million. Motivated by this initial success, ICICI Bank is now extending its
linkage model, to smaller MFIs, through a strategic partnership with CARE. By dealing direct with
micro-finance clients, the Bank can satisfy the Reserve Bank requirements to lend to the so-called
weaker sections and it has created assets, which can be securitized and sold on to other financial
institutions.
Furthermore, the ICICI Bank loans are made to groups or to individuals and not to the MFIs. If the
MFIs are unable to recover the loans, it is unclear if ICICI will be able to. The Bank has no presence
in the areas where the clients live and has no staff of its own to collect. Another possible threat for
ICICI Banks long-term success is that the SHG members will become more sophisticated. As their
needs increase, they will start shopping around for less expensive loans, at better rates.
Despite these concerns, ICICI Bank is demonstrating that an urban-based private bank can
effectively and profitably reach the rural poor. This business is now a component of the Banks
mainstream operations and other Indian and foreign banks are appreciating that the rural poor can
be valuable customers. A wider range of financial services is becoming available to hundreds of
millions of people who have hitherto lacked access to any formal financial services at all. This
experience shows that urban based banks, with few rural branches, can make use of the community

RURAL RETAILING
contacts and experience of rural NGOs, so that both parties can cover their costs and do what they
do best, for the benefit of their clients.
Rural Kiosks
ICICI has setup additional partnerships with EID Parry, n-Logue and ITC e-choupal to take advantage
of the rural kiosk network they each have established. Each partnership is designed to build on the
unique strengths of each organization and to truly leverage their experience and relationships. These
partner organizations receive in turn the backing of the second largest bank in India to help expand
their kiosk network. ICICI envisions setting up many more partnerships with MFIs and NGOs that
have the expertise and passion for serving the rural poor.
The Brand ICICI Bank
The much known logo and the colours which remain same everywhere is responsible for strong
Brand recall for the bank.
Fig. 37: ICICI Bank Branch and Logo
The VM for ICICI bank is fixed and remains almost same for all the branches across the country. The
uniform is common for all the employees with strict working schedule. The bank also maintains an
extremely wonderful service and neatness in the bank and which has led to best customer
satisfaction.
Fig. 38: ICICIC Bank interior View



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Comparison of all the Retail on various factors

The various retail store described above are compared under various factors which can further be
sub-divided:
a) Operations
b) Promotions & Customer Relation
c) Products Assortment
The factors are taken after considering the best retail practises both in urban and rural.
The chart on the next page depicts the comparison on various factors stated above, and finally also a
scorecard comparison has been done to rank various rural retailing.









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Parameters
Champion
Agro
Haryali
Kissan
Bazar
Mana
Gromor
Tata
Kisan
Sansar
Choupal
Sagar
Hydric
farm
Godrej
Agrovet
(Aadhar)
ICICI Agrium Easyday
Narmada
Agrimart
Operations

Location near to
Bus/Market/Dealer


System Billing





Invertor/ Generator
for Power Back up






Auto Indenting



N/A

Reorder Level Defined
for Inventory


N/A

Uniform for Store Staff





Price Display (Tickers)



N/A

Labelling on Shelves



N/A

Vehicles for Field Staff



Data NA

Barcoding





N/A Data NA

Promotions &
Customer Relation
Membership





Data NA

Voice SMS







Data NA

Soil Testing



N/A Data N/AV
Advisory Services

N/A Data N/AV
AV Van



N/A Data NA

Feedback Mechanism





Products Assortment

Insurance




Data
N/AV
N/A

Ferilizers
Manufacturing





Advance Facility

N/A
Data
N/AV

Lifestyle









VM





Fig. 39: Comparison of various Retail ( = Yes, Blank Spaces with blue denotes No)

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Scorecard: Comparison of Retail

The retails which have been discussed above are compared on various different parameters and
finally a scorecard has been prepared based on the weights given to each parameter:
Parameters Weights
Services 20
Assortment 20
Geographical Spread 15
Operations 20
IT Enablement 10
Financials 15
Total 100

Each of above parameters is further divided into sub-parameters as below:

Parameter Sub-Parameter Weights
Services (20) Field Promotion 4
Store Promotion 2
Soil Testing 2
Advisory Services 1
Credit Facilities 2
Loyalty Schemes 1
Insurance 1
VM 2
Advance Facilities 1
Training 2
Media Promotions- TV & SMS 2

Parameter Sub-Parameter Weights
Assortment(20) Fertilizer 5
Pesticide 3
Seed 3
Specialities 3
Farm Equipment 2
Vet 2


Output Side 2


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Parameter Sub-Parameter Weights
Geographical Spread (15) No of Villages covered by each MGC 5
No of States operating in 5
No of stores/state (Density) 5

Parameter Sub-Parameter Weights
IT Enablement (10) ERP 5
Inventory Management 3
Field IT Promotion 2

Parameter Sub-Parameter Weights
Operations (20) Reorder Level 2
Manual/System 2
Product Placement/Space Utilization (good/average/poor) 3
Owned/Franchisee 2
Labelling on Shelf/Prices 2
Incentive 2
Feedback/Grievance Mechanism 3
Barcoding 2
Indenting & Availability 2

Parameter Sub-Parameter Weights
Financials (15) Gross Profit Ratio (PBT/Sales) 2.5
Operating Expense (Total Expense-COGS/Sales) 2.5
Current Ratio (Current Assets/ Current Liabilities) 2.5
Inventory Turnover (COGS/Inventory) 2.5
ROA (PBT / Total Assets) 2.5
Debt/ Equity Ratio (Liabilities/ Equity) 2.5

Assumptions: Since the finances of the retail wing of companies are not available hence the financial
comparison has been done for the overall company
All the retails have been given score on the basis of the above parameters and an overall rank is
given to the retails:

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Parameters
Champion
Agro
Haryali
Kissan Bazar
Mana
Gromor
Tata Kisan
Sansar
Choupal
Sagar
Hydric
farm
Godrej Agrovet
(Aadhar)
ICICI Agrium Easyday
Narmada
Agrimart
Financials (15) 7.5 3.5 9 6 9.5 4.5 10.5 6.5 10 9.5 9
Services (20) 18 18 19 7 10 5 1 20 19 15 6
Assortment (20) 15 14.5 17 9.5 14 8 5.5 20 17 20 6
Geographical
Spread (15)
4 9 11 10 9 5 8 14 15 11 5
Operations (20) 15 18 15 2 17 4 10 19 19 19 3
IT Enablement (10) 4 7 7 0 5 0 3 9 9 9 0
Total (100) 63.5 70 78 34.5 64.5 26.5 38 88.5 89 83.5 29

The scorecard shows that Agrium tops the chart with world class operations and efficient supply chain. Mana Gromor center lies on 4
th
position which
shows that we need to improve at lot of parameters by strengthening our backend & frontend operations.
Coromandel Retail lacks in geographical spread as it is concentrated in only one state and so risk is associated with it as the entry barriers is low. Also the
company lacks in financials and weak in IT enablement. Coromandel retail need to introduce more of IT operated processes.

RURAL RETAILING
Recommendations
1) Tie up with some telecom company to provide live updates like Mandi rates, weather
forecasting and other crop related information to atleast Member farmer like IFFCO Kisan
Sanchar Ltd. which is collaboration between IFFCO & Airtel and was used by HKB
2) To build a strong brand in AP, need to improve connect with farmers & service in terms of:
a) Using same logo and colour code throughout the retail network as used by ICICI and also
maintaining the same
b) Use uniform for the store employee to show uniqueness at the stores as done by HKB &
Choupal Sagar
c) Maintain clean store which is the first point of contact for farmers
3) Company can charge farmer a fixed amount for classroom training, product literature, and
some visits from agricultural experts during the crop cycle. For an extra price, the farmers
could also buy complete soil profile test. Similar was followed by Choupal Sagar.
4) The TA & DA allowance of the field staff should have a min. fixed amount and over and
above that it can be linked to budget achievement. This is one of the main motivational
factor and need to be looked upon seriously.
5) Geographical expansion to other state territories can be done through Franchisee
Model rather than going for COCO model while continuing the same in AP & Karnataka.
This will reduce the huge investment while still continuing the brand. This Franchisee model
will be slightly different than the usual one with better control.
6) Introduce a low price day in a month by offering a small discount to all non-fertilizers, the
control has to be made strong to avoid frauds
7) Introduce facility for advance
8) Labelling on shelves should be mandatory to monitor expiries and better management
9) Revenue Sharing model as against fixed rental model. . The model, under which retailers
share a percentage of their sales with the owner, is seen as a fair way of sharing risks
between the two stakeholders. Revenue-sharing model increases the responsibility of the
developer to bring in footfalls by providing good upkeep of the infrastructure. The model is
sustainable during the downturn as the retailers do not have to take the hit alone. Players
can leverage this opportunity by collaborating with developers to work out a win-win model
and a revenue sharing deal.
10) Categories review should also be done on inventory turnover and inventory holding cost to
focus on better management of inventory, higher inventory may result in obsolete stock,
margin leakages, damages and high carrying cost (interest, space, handling costs, etc.)
11) Cost should become the focus and cost cutting should either become a KRA of mangers or
it should be linked to some perk

RURAL RETAILING

12) Need to be strong on IT so as make our operations strong like discounts should immediately
flow to the stores so as to ensure immediate access to the discounts


13) Our retail can have two or three tier store system i.e. small stores at village level which
would be responsible for lead generations, creating awareness, communicating prices and in
case of a sales conversion, it would be delivered to the customer from the Mandal level
bigger store. The mandal level store would be a larger store with a godown like the one we
have currently.
14) Appointing SHG as a sales person for the MGC. SHG in various villages would act as source of
lead generations and after the final sales conversion, some fixed margins would be paid to
them.
15) To increase its spread to various other state, the company can think of acquiring other agri
retails like Champion agro in Gujarat and Khushali Kisaan Kendra in UP.







RURAL RETAILING

16) Store wise focus strategy which our retail has started should be followed vigorously



17) Introducing Auto-indenting & Barcoding for better monitoring and management, to reduce
expiries and damages and to ensure the availability at right time.
18) To have a sustainable business, we need to have a strong USP i.e. differentiation or cost
leadership.



RURAL RETAILING