ITC: At your doorstep - Business Standard
September 26, 2011
ITC wants to try its hand at fruits and vegetable vending. It has introduced mobile pop-up stores in Hyderabad that offer consumers the convenience of doorstep delivery of a wide assortment of fruits and vegetables as well as a modern shopping experience including electronic weighing and billing, use of credit cards for payment etc. The company plans to expand beyond Hyderabad after the initial feedback. According to reports, pilots have also been done in Chandigarh and Pune to understand these markets.
Choupal Fresh Retail stores were initially piloted in Pune and Chandigarh to understand the differences in consumer shopping behaviour in different cities. Once that objective was achieved, the pilot continued in Hyderabad only. The Choupal Fresh Pop-Up format leverages the learnings from the management of the retail stores.
The Choupal Fresh stores sell vegetables and other food products for half-a-day on an appointed day, at common areas in a gated community. The company representatives have drawn up a timetable after discussing the timings with residents' associations.
"Choupal Fresh Pop-Up stores is an idea that combines the convenience of vegetable push carts and the shopping experience of modern retail stores from a consumer perspective. A larger share of consumer price is ploughed back to the farmer due to the lower costs along the value chain," says S Sivakumar, divisional chief executive, agri-business division and member, corporate management committee, ITC Ltd. He says the concept will benefit the consumer as well as the farmer while building a viable business model for the company. "The pop-up stores combine the best of both the worlds," he adds.
The Choupal Fresh stores are serviced by a strong back-end of farmers in clusters of villages around Hyderabad. The F&Vs are sold at market prices. "While the consumers appreciate the door-delivery convenience offered by the pushcarts, the limited range of F&V on offer and management of quality and wastages were the challenges. Further, the geographic spread of houses in residential localities required frequent movement of pushcarts by the operators; this meant operationally complex and financially unattractive business," says Sivakumar.
Arpita Mukherjee, a professor at the Indian Council for Research on International Economic Relations, believes that the new retail model is indeed beneficial for the customers as it combines the benefits of both organised and unorganised retail. "The advantage is consumers don't have to spend hours bargaining with the local vendors and the chances of getting cheated are rare. But the success depends on how well the supply chain is arranged as F&Vs are consumed and purchased on a daily basis. Also, the chain is fragmented in our country. Indians don't have big cold storage freezers like the Western countries. Thus, only time will suggest how successful this model be."
All in all ITC's new move makes us think in western direction, making our lives more organised.
