Fmcg firms tap e-governance infra to reach remote villages – livemint

New Delhi: Arabinda Giri, 29, hates Tuesdays. High profit margin It’s the day he has to travel 25km to Diamond Harbour from his home in Uttar Haradhanpur village in 24 South Parganas district of West Bengal to buy household essentials and pay electricity bills for his family and neighbours. High profit service business Once a month, he also has to go to Kolkata, 145km from his village, to buy stuff that are not available at the nearest market.


For fast-moving consumer goods (FMCG) firms, Giri is the sort of consumer they have been trying to reach. Low investment high profit business in delhi He represents 67% of Indians who live in the 638,000 villages the sellers of personal care and household products are chasing.

Now, a bunch of packaged goods firms, such as ITC Ltd and Dettol-maker Reckitt-Benckiser (India) Ltd, are working on a strategy to leverage a part of the infrastructure that a few other non-FMCG firms have built as part of the central government’s e-governance initiative in the last decade.

Last month, biscuit-to-shampoo maker ITC started a pilot with Kolkata-based Sahaj e-Village Ltd, a venture of the Kolkata-based infrastructure financing firm Srei Infrastructure Finance Ltd, to reach villages with a population as low as 1,000 in three states. Low cost business ideas with high profit in india Depending on its success, ITC will extend the initiative to 25 states and six Union territories.

“We continuously explore and evaluate possibilities to expand our rural distribution for FMCG products. High profit business in india An exploratory pilot is being evaluated with Sahaj,” said B. Low cost high profit Sumant, president, FMCG (designate), ITC Ltd.

In this model, Srei will leverage its network of Sahaj centres at gram panchayats—so far selling financial products and other government schemes to villagers—to sell packaged goods. Items with high profit margins “The one-man Sahaj centres at the gram panchayats will act as point of ordering and delivery for village consumers. High profit home business The typical time for delivery is about a day,” said Santosh Dash, chief executive, Sahaj.

Piggybacking on such initiatives will help consumer goods lower distribution cost as they do not have to set up a supply chain. Small scale business with high profit in india In this model, Dash said, Sahaj centres will be directly connected to the back-ends of the partnering firms (such as ITC and Reckitt) to determine the closest possible point of sourcing of the product. High profit online business The firms send the products to the block-level centres of Sahaj, which then delivers it to the Sahaj centre located at the panchayat level.

“Logistics is crowd-sourced. High profit products to sell online We leverage daily public transports, or people with two-wheelers who travel between these places on a regular basis. High profit industries So, the cost of logistics is low,” said Dash. Small business with high profit In the model, there is no minimum order size. High profit farming “Even if someone wants a pack of biscuit that would cost as low as Rs.5, we facilitate that.”

There is no additional cost for firms in this business model. Low investment business with high profit “It’s the retailers’ margin that gets shared. High profit selling We already have set up an infrastructure which we are trying to leverage. High profit business ideas With retailing of packaged consumer products, the people at Sahaj centres also get a chance to earn more,” added Dash.

By March 2018, Sahaj will have 110,000 centres in 25 states and six Union territories. High profit greenhouse crops Till February, Sahaj had 39,087 centres, up from 26,627 a year ago. High profit business in malaysia The firm has so far invested about Rs.300 crore in establishing the network, and hopes to turn profitable by the end of the current fiscal, said Dash.

According to Rajeev Khandelwal, sales director, Reckitt-Benckiser India, the firm gets about 30% of sales from rural areas. High profit margin products to sell on ebay Besides different external channels, Khandelwal said the firm has set up its own sub-distributors directly in villages as against the earlier practice of selling items in these markets through a wholesale distributor. Low investment business with high profit in india “We have increased our reach to 8,000 villages directly by end of this quarter. High profit margin foods Rural is our fastest growing channel,” he added.

Besides, Dash said the firm has also tied up with Godfrey Phillips India Ltd and Reliance Retail. High profit margin products to sell online Of the estimated 9 million retail stores in India, ITC products reach 4.3 million. Low investment high profit business in pakistan ITC’s rival and the country’s largest packaged goods firm by sales Hindustan Unilever Ltd (HUL) reaches about 6.3 million outlets.

“It’s a good way to reach them (rural consumer). Business with small investment and high profit There’s no additional cost involved in supply chain, and increases ITC’s retail reach. Small scale business with high profit But ITC needs to figure out the products meant for the target consumer. Low overhead high profit business Premium or semi-premium won’t work. High profit business ideas india You need value products for consumers in these markets. Business with low investment and high profit However, this may actually help ITC in developing a new market without much investments and the company may be able to leverage later,” said Sachin Bobade, analyst with HDFC Securities Ltd.

This is not the first time ITC is trying to enhance rural reach. High profit plants “ITC has been a pioneer in rural distribution through its e-Choupal network. High profit small business ideas 2013 The key differentiator for ITC when it comes to the rural business strategy is its extensive distribution reach, relentless focus on innovation, superior technological interventions and a basket of consumer products that meet the aspirations and needs of rural India,” said ITC’s Sumant.

ITC has been focusing on the packaged foods and consumer goods segment to cut its dependence on cigarettes to reach Rs.1 trillion in total revenue by 2030. High profit margin business india For the year ended 31 March 2015, the company’s revenue from packaged food products stood at Rs.6,411.27 crore, overtaking HUL’s revenue from the food business ( at Rs.5,522 crore).

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