Date:02/12/2007 URL: http://www.thehindubusinessline.com/2007/12/02/stories/2007120251410500.htm

ITC set to experiment with small vendors

K.V. Kurmanath

Hyderabad, Dec. 1

As organised retailers go for cherry-picking the high-earning urban consumers offering them a wide array of products, what will happen to the scarcely populated rural areas and small farmers?

There is a possibility of some such exclusions from the retail growth story.

“The growth story is double-edged. If one is indifferent, the divides turn wider. If you have innovative methods, you can reduce the gaps,” Mr S. Sivakumar, Chief Executive Officer of ITC’s International Business Division, said.

He was addressing the Leadership Summit organised at International School of Business here on Saturday.

New model

The hub-and-spoke model would help in building an enabling environment for business to catch up in the hinterlands.

Citing the e-choupal experience of ITC, Mr Sivakumar, who pioneered the concept, said agricultural business could be an important thread to build on the retailing network.

It was not shopping behaviour that deterred the retailers to go into the rural markets.

“They (villagers) are quite used to travelling a bit to shop for a variety of things. They do buy in bulk as their urban colleagues,” he pointed out.

The players could device methods to help the farmers generate incomes and induce consumption.

ITC, which is building extensive network for its retail initiative Choupal Fresh, is currently working on three experiments to further spread retail roots, while enabling head-load vegetable sellers and push-cart vendors to aspire for additional incomes.

“We are working with a micro-finance institute to help head-load vegetable vendors to move on to push-cart selling. The MFI would support them financially, while ITC would help providing the goods,” he said.

The other experiment is talking to push-cart vendors associations to create a community brand that would give them additional value. Yet another experiment is to set up franchisees and sub-operators in this format.

“After six-nine months, we will scale up the activity after seeing results from these experiences,” he said.