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Dis-intermediation

The farmers have to approach the intermediaries to make their product available in the market. The intermediaries generally procure the product at a throwaway price and sell at attractive prices in the urban markets. In return, the rural producers get a very meager amount, as compared to the profit the intermediaries make out of selling the product directly.
Therefore, the farmer is lacking market information and denied the real benefit of the products. E-commerce provides a solution to these issues. Internet and other communication technologies can help the farmer to update the market and help him understand the customers in the market. Thereby, it heips in the elimination of the intermediaries, who eat up the profit.

Re-intermediation

Then comes the re-intermediation. Re-intermediation is the process of assigning the work or same job to the existing channel member. It is like redefining the role of the existing intermediaries. In the rural sector, introduction of E-commerce can enable the intermediaries to take a new avatar as a consumer friendly middleman. It is these intermediaries, who get better quality products for the industries and also a better price for the producers. This can happen through introduction of E-commerce in rural areas. Since the rural producers have trust on these intermediaries, they don't see information and communication technology as a complex task.

Issues to be Addressed

The two key elements that need to be looked into while using E-commerce in the economy are: -

1. Affordability
2. Localization

ITC's E-Choupal and HLL's Project Shakti

For an E-commerce model to be appropriate and successful in any area, be it rural or urban, it should be a two-way model. Also, E-commerce, as one of the information and communication technology tool, should facilitate a two-way communication. Reciprocity of communication should be the optimum one. The E-commerce model should include the participants as both buyers and sellers.

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* Contributed by -
Krithika R. & Thiruvathal M.,
MBA - II Year,
Thiagarajar School of Management, Madurai.