Rural Retail 

(A)          Introduction

          Retailing with Supply Chain Management is a booming business now a days. Big business houses like – Reliance, Bharti …………… are in this business with high returns. Nevertheless so far this business is confined only to the limits of urban and at the most semi-urban localities. Rural India has by and large remained out of the ambit of this business so far. Perhaps high establishment and maintenance cost coupled with low effective demand are the dissuading factors. 

          India Post on the other hand, with a huge network of about 1.25 lakh rural Post Offices has been in the distribution business of mail and financial products in the rural areas since its inception. The modern day concept of retailing and Supply Chain Management has been in practice for India Post for long now. The only difference has been that in case of India Post the retailing is limited to the sale of Postal products like Post Card, Letter Cards and Small Saving Services like Recurring Deposits, Savings Bank Deposits, Monthly Income Schemes etc. Besides the platform was predominantly manual.

          Because of the changing business scenario the Postal business especially in the rural areas has been shrinking over a period of time. Increasing penetration of mobile phones have adversely affected the personal mail while relatively less attractive interest rates have affected the business in small scale Saving Schemes, NSCs etc.  

          Yet for being politically and socially a very sensitive issue, the closure of rural Postal network is not possible even if the rural network is today the main contributor to almost more than a thousand crores Postal deficit 

          In these circumstances to seek new avenues of business for this rural Postal network is a compulsion for India Post. Rural retailing of products through vast network is one of the strategies that will not only improve the viability of this network but also create a situation of profitability for India Post no less parallel to Indian Railways today. 

          With this objective of utilizing the rural network, Uttarakhand Post has entered into an agreement with Divya Pharmacy at Haridwar for retailing of its health products through a network of 2716 (about 2500 in rural) Post Offices. The agreement came into effect on 7.7.07 and by now has done a business of Rs. 22,59,039 in the year 2007-08 and Rs. 1,35,23,293 earning net commission of Rs. 4,62,388 in the year 2007-08 and Rs. 27,13,158 in the year 2008-09 (till Dec.08) for the circle. 

(B)     The main features of the agreement are 

(1)      The tie-up deals with sale of Ayurvedic health products, cosmetics etc. through an extensive network of 2714 Post Offices in Uttarakhand 

(2)      The indenting for the products is done directly by the Head Post Offices / Sub Post Offices by placing the requirement with the supplier i.e. Divya Pharmacy in a prescribed form. 

(3)      The supply is made through Logistic Post. For this the circle is divided into 4 routes. When order for a particular route exceeds the threshold level these are sent under Logistic Post to the various Post Offices. The enroute Post Offices get the supply direct and also act as Nodal Distribution Centers for others. 

(4)      The SPM further distributes the products up to the Branch Post Office level through normal Postal Distribution Channel and is independently responsible for management of stock and sale for his unit as well as the BOs under its jurisdiction. 

(5)          Proper account books and procedure is provided to all Post Offices. At HO level the stock summary is maintained on daily basis through the information received by SO Daily Account about sale and stocks. 

(6)      The sale proceeds are sent to Divya Pharmacy through the CBS account of PNB by all HOs. 

(7)      The Department gets a commission of 20% on sale of the herbal health products. In accordance with Directorate letter No. 16-16/2007-08/BD&MD/P-II dtd. 13.12.07 an incentive on sale is given to the staff at various levels in accordance with a prescribed formula. 

(8)      All the SDIs/ASPOs incharge of Sub Divisions have been designated as Area Manager for proper management of the rural retail service in their Sub Divisions. 

(9)      Divya Pharmacy has prepared a software DYRIMS (Divya Yog Remote Inventory Management System) suited for the postal environment for retailing of products. The software is at the testing stage. 

(C)     Sale profile

 The business achievements are as follows-

Year                      Sale             Commission earned          Incentive paid

2007-08             22,59,039                  4,62,388

2008-09          1,35,23,293                27,13,158

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