Thursday, July 31, 2008
Apart from urban retail one can see a lot of activity on the rural front too. A host of companies have started their rural retail/procurement initiatives in the last few years. ITC's echoupal initiative is one which has received a lot of media coverage and recognition. echoupal was initially conceptualized as a procurement model, but with the addition of Choupal Sagars ( Rural Malls) they are also planned to be used as a reverse supply chain to supply back to villages.
Retail and Petroleum Companies
Apart from various corporate houses which have ventured into the rural retail scenario, some of the oil PSUs have also started their retail ventures in villages. In the urban areas many oil comapnies have started leveraging their real estate advantage to set-up retail outlets. Like Bharat Petroleums In&Out.
IOC the fortune 500 oil PSU has started a rural retail venture in 2005. They have started their rural petrol pump cum retail stores in many villages. The idea is to become a one-stop shop for the needs of a villager, and provide him with quality products including fuel. Earlier the consumers in villages had to rely on either the unauthorized petrol diesel dealer in the village or travel for 10-15 Kms to buy fuel for his tractors or the pump sets. With the setting up of pumps in villages you are able to reach the customer at his door-step.
Today there are more than 2000 of these rural retail outlets in rural areas across the country and a lot of recognition has also come for the intiative. In September 2007 the initiative was awarded the ‘Most Admired Retailer of the Year’ Award in the category of Rural Retailing, by the India Retail Forum (IRF), and the ‘Retailer of the year- Rural Impact Award’ given by the Asia Retail Congress (ARC).
The rural retail outlet is a low investment model for IOC, wherein it looks at a investment of 6-9 lakh rupees vs an investment of 1-1.5 crores for a dealership in urban areas, with a quick pay back of 3-4 years. The dealer has to sell not only fuel but non fuel items like, seeds, fertilizers, and FMCG products. This revenue from non-fuel sales is expected to supplement the income of the dealer.
The models has been rolled out rapidly across the country, but there are certain bottlenecks which are coming up , .......