ITC's giant mall in rural MP

Located 50 km from Bhopal, Choupal Sagar sells everything from soaps to tractors

Rural retailing seems to be the next big idea for several Indian companies. ITC has quietly rolled out its rural retailing initiative called Choupal Sagar. The cigarettes and FMCG major has opened a giant shopping mall in rural Madhya Pradesh, 50 kilometres from Bhopal.

The range of products being sold at this three-week old store is bigger than any of the hypermarkets in Hyderabad or Bangalore. Located in the heart of MP's soya cultivation belt, Sagar sells everything from soaps and shampoos to readymade apparel, consumer durables, two wheelers, and even tractors.

According to ITC officials, the mall is an extension of the company's much acclaimed E-choupal programme which gives farmers access to information and new markets through technology.

"In a sense, the mall brings our E-Choupal project full circle. The supply chain re-organisation has now been extended into a strategic rural marketing channel," an ITC executive said.

ITC is the second company after the Ajay and Vikram Shriram-controlled DSCL Ltd to tap the opportunity with large format retail stores. DSCL has ten such stores in North India. "By March 2006, we are planning to have 30 stores in the region," DSCL Ltd chairman Ajay Shriram told Business Standard.

The ITC mall is located next to the company's procurement centre where farmers come to sell their produce, which helps the company in generating larger footfalls. Company sources said that already the footfalls are above 100 a day.

"These are very good experiments being carried. Rural markets offer a great opportunity but the density of consumers in villages may not be as good and every store will have to service 50 or even 100 villages, which poses a huge logistical challenge to companies," said Arvind Singhal, chairman of KSA Technopak, a Delhi-based Retail consultancy.

At ITC's rural mall, the company has introduced several brands and products tailor made for such a market. ITC's Wills Sport has come up with a low-cost apparel range called Springfield. Choupal Sagar also complements the firms efforts to push its biscuits and confectionery brands Sunfeast and Candyman in the villages.

Sources said that the mall has cost the company around Rs 4 crore and will take three-to-four years to break even.

The company declined to comment on its plans about expanding the chain to other parts of the country.

Rural retailing

• The range of products being sold at this three-week old store is bigger than any of the hypermarkets in Hyderabad or Bangalore.
• The mall is an extension of ITC's E-choupal programme
• ITC is the second firm after the Ajay and Vikram Shriram-controlled DSCL Ltd to set up large rural retail stores