The contours of ‘RURAL INDIA’ have been changing continuously and rapidly. For an ancient Indian, ‘RURAL’ is a synonym for extreme poverty, agricultural farms, laborers sweating hard under the scorching sun ploughing the emaciated bullock carts to earn meager incomes just enough to meet their ends. However, today this is considered a distorted caricature, effacing the huge potential lying in the rural households. Gandhiji's ‘swadeshi’ dream was all about local self-reliance on the village level to revitalize rural India. E-commerce is a fuel to propel this dream. It’s a high time for the small scale industries not to depend on sales entirely through government subsidies. It an essentiality to generate a new class of entrepreneurs. So instead of rural India coming to urban marketing centers, the reverse phenomena has to take place and e-commerce can successfully pioneer this movement.
Post liberalization, tech boom has anchored India’s growth lifting the country above the level of an impoverished third-world giant. Ironically, the same tech boom holds the blame for widening the digital and economic divide between the rural ‘aam aadmi’ and the urban elite.
E-commerce though a relatively recent phenomenon, has already had a profound impact on life in rural India. Breaking through the tyranny of distance will cause unprecedented changes, opportunities and threats in many key areas, marketing being the major one
Some Myths Of Rural India
Rural India is not ONLY agricultural. More than a third of rural households in India derive their income from services or manufacturing and not from farming.
According to the 2007 Census, 45% of rural Indian households avail banking services strengthening them financially and economically.
Where Indian cities are struggling for transpiration, housing and other infrastructure, the economy is still based on suburbs and the scope of rural suburbs is immense.
IIT-Madras’ Prof Jhunjhunwala with his team have come up with several low-cost innovations to serve the rural market, which includes a Rs 27,000 worth ATM, compared to a normal ATM costing Rs.7.2 Lakhs, a low-cost internet cafe (at Rs 50,000) offering telephone, net, multimedia, a PC with web camera, printer and power back-up. According to the E-Readiness Assessment Report few months ago, this kiosk which is up in many villages of Tamil Nadu achieves close to break-even revenues of Rs 100 per day. But the question that haunts us is…”what do villagers need the net for?” well, one of the ,many answers to this question is: Videoconferencing between the farmer in the village to a learned person in the city for reasons numerous, thus saving on the valuable time and money to go to the for the same.
Initially, when marketing was headed for a dotcom with business plan to help companies build brands on the net, PC penetration was a major constraint. Hence internet penetration was very limited. However, now part of the population of 600 million rural Indians have access to the net through such low-cost kiosks, and that owning a PC is no longer necessary to use the net immediately shows the potential that each rural internet kiosk has to provide eyeballs or ‘netizens’. The aggregation of demand from all these users will make it necessary for companies to start using the net as an integral part of their marketing strategy because it will be commercially viable.
Another aspect of technology is that agriculture is vital to India, producing 23% of the GDP and feeding a billion people, and employing 66% of the workforce. India's agricultural productivity improved to the point that it is both self-sufficient and a net exporter of a variety of food grains. This is credited to the Green Revolution. Yet most Indian farmers have remained quite poor.
One of India's foremost private sector companies with a diversified presence in tobacco, hotels, paperboards, specialty papers, packaging, agri-business, branded apparel, packaged foods and other fast moving consumer goods, initiated e-choupal in 2000. The effort placed computers with Internet access in rural farming villages. The e-choupals serve as both a social gathering place for exchange of information and an e-commerce hub.
Spurred by India's need to generate foreign exchange, ITC's International Business Division (IBD) was created in 1990 as an agri-trading company aiming to "offer the world the best of India's produce". Initially, the agricultural commodity trading business was small compared to international players. In 1998, after competition forced ITC to explore the options of sale, merger, and closure of IBD, ITC ultimately decided to retain the business, challenging the IBD to use information technology to change the rules of the game and create a competitive business that did not need a large asset base. Ultimately, what began as an effort to re-engineer the procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has also created a highly profitable distribution and product design channel for the company. E-choupal has also established a low-cost fulfillment system focused on the needs of rural India that has helped in mitigating rural isolation, create more transparency for farmers, and improve their productivity and incomes.
These e-Choupals formed the center on a network serving both as a social gathering place for exchange of information and an e-commerce hub. A local farmer acting as a sanchalak (coordinator) runs the village e-Choupal, and the computer usually is located in the sanchalak's home. ITC also incorporated a local commission agent, known as the samyojak (collaborator), into the system as the provider of logistical support. Further, ITC also have plans to saturate the sector in which it works with e-Choupals, such that a farmer has to travel no more than five kilometers to reach one.
Modern information and communications technologies (ICTs) and web based marketing of agricultural produce hold great promise for the socio-economic development of rural hinterlands in India. However, if they are to serve the `unserved’ and spawn innovation at grass root level their implementation must be carefully localised.
The ‘anytime-anywhere’ advantage of e- marketing leads to efficient price discovery and offers economy of transaction for agricultural trading. This attracts any rural developmental agencies to deploy websites for marketing agricultural produce.
The advent of modern information and communication technologies (ICTs) such as telephony or the internet hold unprecedented opportunities for rural development. Researchers, policymakers and entrepreneurs alike frequently claim that ICTs represent one of the most powerful tools in the struggle against poverty.
The significance of the Web in disseminating information and communicating this effectively to the targeted user has been sufficiently debated. Most experts agree to it that the Web will have a great impact on the way rural marketing would be conducted in the future. Several studies have set out to assess the current performance of agricultural websites in some key areas of information provision through such websites maintained by government departments and agencies, private profit-motivated as well as non-governmental organizations (NGOs), and to identify the barriers to communication. The results offer significant implications for researchers and practitioners interested in development of portal information structure for Web development, multi-dimensional communication, electronic commerce networks and e-commerce trading platforms for rural marketing.
One further idea for the Digital Mandi that evolved was Virtual Telephones or village voice mail systems, as have been set up in Brazil. These can provide individuals with their own telephone number and access to a voice mailbox. In other words, the individual need not possess a telephone but can receive calls to a voice mailbox using his/her personal PIN. Extending this idea to text e-mail access, a South African company assigns e-mail addresses to every Post Office box address in the country, thereby providing electronic mail indirectly to around eight million South African households through public internet terminals located in post offices which users can access with a personal identification number. The Postal Department in India has now taken up a similar programme.
However, there are some challenges to agricultural website usability for rural marketing in India which arise mainly because of the highly specific local needs and the great diversity in local conditions. The major challenges include:
- Poor literacy rate – low use of textual information
- Remote village locations - physical distances compounding problems of lack of proper price information and habitual dependence on middlemen.
- Absence of alternate media for dissemination of info.
- Absence of info in vernacular languages and multiplicity of languages.
- Cash crunch of farmers, immediate cash transaction system and reluctance of banks to provide soft loans to farmers
Economic, low-cost solutions - any technology solution aimed at benefiting the masses in rural India must be affordable and low-cost so that the perceived economic benefits of such an endeavor are much more than the cost of switching over to a different technological solution
In the absence of timely and correct information about prices, arrivals and market trends, compounded with the problems of low cash-at-hand and proper advice, farmers are forced to sell their produce at lower-than-expected rates. The result is that the benefits of the ‘green revolution’ have not really percolated down to the farmers.
Another good example of the creation of relevant local content are the ‘Infoshops’ in Pondicherry, India. After information requirements are identified during a trial period, volunteers from the village create a local database comprising government programs for low income rural families; cost and availability of farming inputs such as seeds and fertilisers, grain prices in different local markets; a directory of insurance plans for crops and families; pest managements plans for rice and sugar cane; a directory of local hospitals, medical practitioners and their specialties; a regional timetable for buses and trains; a directory of local veterinarians, cattle and animal husbandry programs. All these preceding experiments contributed to the Digital Mandi design.
However, Digital Mandi has shown that the presence of a number of desired features in a website leads to higher user satisfaction. Such features are broadly aimed at satisfying one or the other of the following immediate user objectives:
- · Ease of access.
- · Up-to-date content.
- · Layout, design, consistent themes.
- · Easy navigation.
- · Higher interactivity.
- · Access through multiple media.
- · Higher use of non-textual information.
- · Multiple languages.
- · Lower cost of transaction.
It was assumed that each of these factors contributed to higher user satisfaction.
The Digital Mandi project now wants to integrate an ethnographic approach with flexible systems methodology to focus on the communication design issues for web-portals specifically devoted to rural marketing in India.
In the Mandi, the following operational process was followed: Inbound logistics > Display and Inspection > Auction > Bagging and weighing > Payment > Outbound logistics. Hence, E-choupal brought about a strategic chage to the process: Pricing > Inbound logistics > Inspection and grading > Weighing and payment > Hub logistics
The e-Choupal model has shown that a large corporation can combine a social mission and an ambitious commercial venture; that it can play a major role in rationalising markets and increasing the efficiency of an agricultural system, and do so in ways that benefit farmers and rural communities as well as company shareholders. eChoupal, in one-line, is a glue binding ITC's rural retail foray with Choupal Sagars, currently 28 across nine states.
ITC's example also shows the key role of information technology - in this case provided and maintained by a corporation, but used by local farmers - in helping to bring about transparency, to increase access to information, and to catalyse rural transformation, while enabling efficiencies and low cost distribution that make the system profitable and sustainable
Whether rural India will thrive or even survive in the future will depend on how successfully they make the unavoidable transition to being part of a new global economy
