Centre plumps for rural FMCG e-sales

Move aimed at enabling sales of goods from firms like Patanjali, P&G at common service centres

March 08, 2017 10:41 pm | Updated March 09, 2017 12:50 am IST - NEW DELHI

Loving portrait of two farmer of Indian ethnicity standing in the green field & using ipad.

Loving portrait of two farmer of Indian ethnicity standing in the green field & using ipad.

The Centre has initiated talks with FMCG companies to sell their products online in rural areas through common service centres (CSCs) as it looks to increase the business for such centres.

While a deal has already been worked out with Baba Ramdev's Patanjali Ayurveda, negotiations are underway with the likes of Procter and Gamble and Crompton Greaves, an official said.

“CSCs are designed to be the hub Centre of activities in rural India,” the Minister for Electronics and IT Ravi Shankar Prasad said. “The government is focused on expansion of CSCs because of their inherent strength to transform rural India. With the sale of FMCG products, the door has been opened for popularising e–commerce through CSCs.”

There are more than 2.5 lakh CSCs across the country which enable people, particularly in rural areas, to access government services online. These services include ration card, birth certificate, train tickets and online form submission, among other things.

Going beyond delivery of public services through such centres, the Centre is now opening up to tie-ups with private companies for their products to be sold through CSCs to increase profits for Village Level Entrepreneurs (VLEs). For example, CSC also has a tie up with Videocon d2h and Reliance Jio to sell their connections.

“There is an increasing demand for FMCG products in villages, so it was decided to use the vast network of CSCs to sell these products. People in villages can come to these centres and place order for the products they want online,” Dr. Dinesh Kumar Tyagi, CEO of CSC e-Governance Services India told The Hindu .

The move will help VLEs who run CSCs to earn commission on the products sold while also enabling access for customers in rural areas to these products. According to estimates, a VLE is likely to earn a commission in the range of 12-20% on FMCG products, which is far higher than less than 10% on other services offered.

Higher margins

Currently, by offering these online services, these centres together earn commission of more than ₹2 crore a day. The Centre is eyeing to ramp this up to ₹10 crore a day.

“The tie-up with FMCG companies will help them do more business as the margins are higher. Usually taking franchise for a brand like Patanjali costs a lot. But here we on behalf of the VLEs try to get the best deal for them,” Mr. Tyagi said.

He added that all the back-end and logistics would be taken care of by the CSCs.

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