Business Model for India International Horticulture Market in Sonipat (Haryana)

Background: The horticulture sector in India faces a significant challenge due to the high perishability of produce, resulting in substantial losses in quantity, quality and producer returns. To mitigate these challenges, the India International Horticulture Market (IIHM) has been established in Sonipat, Haryana, as a world-class facility capable of managing large volumes of produce from auction to processing and market distribution while maintaining quality standards. IIHM will serve 17 states and provide dynamic business opportunities. The study primarily focuses on exploring business opportunities and their financial viability within the IIHM framework. Methods: The study was structured around two primary objectives: (i) to study and analyse various revenue generation streams for the fruits and vegetables wholesale market and (ii) to identify parameters for different revenue models and prepare a business model for each combination. Data collection involved brainstorming sessions with officials from the fruits and vegetable wholesale market, analysis of detailed project reports (including the Rungis Market) and a study of Asia’s largest wholesale spice market in Delhi. Seventeen distinct revenue generation streams were identified, which were examined under four principal revenue models: renting, outright sales, revenue sharing and collaboration. Simple mathematical and statistical tools were employed for data analysis. Calculations for the rental model were performed using input information, such as area and rate per square metre, provided by the National Council of State Agriculture Marketing Boards, applying a 1.5% annual growth rate after an initial two-year gestation period. Rates for outright sales, revenue sharing and collaboration models were determined by aiming to surpass the income generated through the rental model. Result: The rental model emerged as the most financially viable among the seventeen streams, while the success of outright sales, revenue sharing and collaboration was contingent on pricing structures and partnership levels. Financial projections over 12 years demonstrated significant revenue potential, exemplified by Shops and Sheds under the rental model generating Rs. 9,61,87,50,000. The findings emphasise the necessity of incorporating growth rates into lease models to ensure long-term profitability.