ITC scripting growth plans for small vendors

In an effort to find ways to help those who had been excluded from the growth story scripted by organised retailers, ITC Limited is working on three experiments to create revenue-generating opportunities to head-load vegetable vendors, push cart vendors and small farmers.

"The retail growth story is double-edged. Organised retailers always look at top-end and upmarket consumers but seldom consider the low-density rural areas and small farmers. To reduce this gap through innovative initiatives, we have taken up three experiments on a pilot basis using our hub-and-spoke model Choupal Sagar," S Sivakumar, chief executive officer (international business division), ITC Limited, said here on Saturday.

ITC unveiled its first Choupal Sagar, a rural hypermarket that provides multiple services under one roof, near Sehore in Madhya Pradesh in August 2004. It commenced 18 more Choupal Sagars in Madhya Pradesh, Maharashtra and Uttar Pradesh.

Choupal Sagar creates a platform for farmers to sell their produce. Farmers can also buy quality products for their farm and household consumption from this hypermarket format. These rural malls also provide farmers additional services including soil testing, banking, insurance, medical facilities and restaurants.

According to Sivakumar, ITC is in the process of upgrading head-load vegetable vendors to push-cart vendors.

"We are working closely with a microfinance institute to enable head-load vegetable vendors to shift to push-cart sellings. While the institute will provide financial assistance to the head-load vendors, ITC will provide its supply chain link to them through Choupal Sagars," he added.

Besides, ITC is in negotiations with push-cart vendor associations to create a community-owned brand that would give them additional income. The third experiment that the company has taken up is setting up franchisees in rural areas.

"After assessing the response from these experiments for six to seven months from now, we plan to increase these activities," Sivakumar said.

ITC plans to open over 700 more Choupal Sagar hypermarkets in the country in the next seven to 10 years. ITC's international business division is the country's second largest exporter of agri products with exports of over Rs 1,000 crore. Its domestic sales of agri products stand at over Rs 1,500 crore.