Bringing cooperatives to the online platform


GoCoop.com helps these reach customers directly but old mindsets still a challenge

Nirmala, 48, provides for her family by weaving a few silk sarees monthly. But she found it difficult to scout for buyers. That was before a cooperative society in a neighbouring village agreed to buy four sarees from her every month, at a fixed rate. However, the cooperative doesn’t buy more than the decided quota, leaving Nirmala to look for buyers for additional produce.

“Most members of cooperatives have the ability and the will to produce more but don’t do so because their reach is limited and producers cannot ramp up when they want, unless required,” says Siva Devireddy, founder of GoCoop.com, an online marketplace for cooperatives to reach out to customers and businesses.

He adds cooperatives have “not received the importance they should have been given”. The delinquency rate among self-help groups, even during downturns, is only one per cent, showing the reliability of this model, he says. “So, here are a set of people, often uneducated, not only doing business but also making money out of it. With the proceeds, they not only run their livelihoods but also return money to banks. Of every 100, 99 repay loans on time.”

The market

For cooperatives, the marketing channel is filled with middlemen, often leading to lower realisation. “We realised there are several traders, suppliers and other middlemen between the producer and the buyer,” says Devi Reddy. “The fundamental challenge for rural producers is marketing. Because of the intermediaries, they are far from consumers.”

As a result, many of these entities are struggling, charging nominal prices and recording long payment cycles, sometimes about six months. “Therefore, we wanted to start a marketplace that would enable these producers to directly reach consumers. But it was necessary to be only an enabler, not an intermediary,” Devireddy says.

 

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SOURCE: http://www.business-standard.com/

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