Rural Hypermarts - ITC’s 'Choupal Saagar'

In the previous blog I had touched upon most of the options that would be available for retailing in villages, but I did leave out a new format being tried out by ITC. ITC is coming up with rural hypermarts, called 'Choupal Saagar'. The Choupla saagrs are aimed to become a multiple service provider for the villager, a single point where he can sell his produce and purchase consumables, insurance, farm inputs, and so on.

The first of these Malls has come up in Sehore MP. The number has gone up to 10 with another 9 in the pipe line according to http://www.itcportal.com. The estimated cost of setting up each choupal is around 5 crores with each mall spread across 5 acres. And the company has plans to open 700 such hypermarts across the country in the next ten years. The plan is to create a linkage between the echoupal and choupal saagar , and the same catchment of farmers who are engaged with the company for the sale of their products should also become the first customers of the choupal sagaar.

The obvious reality is that these malls have come up in the more prosperous areas of the rural country side, not in the far flung and isolated areas of the country. It is an experiment which many companies are watching with great interest and infact many of them have tied up with ITC to provide their services to farmers who shop at the hypermart.

It is said that the point where the farmer collects his money for the sale of his produce is located at the back of the hypermart. Designed such that the farmer has to walk through the mall, and thus break any hesitation that he might have and also see the products up for sale and perhaps on his way back also make some purchases.

Rural Retail Options

With retailing in a boom in urban India, it maybe is the right time to discuss about retailing alternative in villages of India. There is misconception that there are limited options when one comes to rural retail. Infact in terms of sheer variety the options that a rural consumer may have may not be bad in comparison to the urban consumer. Though the options in urban areas have increased a lot in the last few years. Coming back to the main issue, rural retail, here an attempt has been made to list out the various alternative retail options for a rural marketer and strategy there of.

There are basically five different options for a manufacturer to reach the consumers in villages first is the omnipresent grocery shops which exist in the rural areas, and there are close to forty lakh such shops spread across the six and half lakh villages. These grocery shops are not homogenous; they vary in their sizes, structure and buying preferences. And though generalized as grocery shops, in bigger do have specialised shops. No company planning to succeed in rural markets can do without planning for these shops.

The second retailing option is the one which has been studied and researched more than any other aspect of rural retailing that is Haats and Melas. The number of these Haats and Melas across the country has been put to be more than seventy to eighty thousand across the country. And there have been studies, which suggest that the villagers prefer these Haats to make their purchases to the village retailers.

The third retail alternative is the shops in the nearest small town. The village consumer tends to visit the small town or the district headquarters on a regular basis. The visits linked to his sale of agricultural produce or could be to purchase farm inputs and he combines his FMCG and durables purchase with this. So even if a company has a good direct coverage plan in place, it shouldn’t ignore the wholesale markets, and in certain categories like durables restrict their presence to the small towns itself.

The next alterative is the prevalence of mobile retailers in the villages. This is an area where there is paucity of reliable data. They are small retailers who move from village to village on cycles or on foot selling their goods to households. In certain categories like cosmetics and bangles they have a strong presence. The last option for retailing is a combination of various new and old outlets which have been set up for different purposes put to use to distribute products. The examples of these include ration shops, post offices, petrol retail shops and the newer formats like echoupal and other kiosk based options.

To develop a complete retail strategy in villages, one should plan to address most of these alternatives; he should have plans to tackle the wholesalers in the small towns, and the retailers in the villages and should have plans to accommodate the major Haats and Melas which occur in the area.