MSME Day 2024: “MSMEs are not just participating in the $300 billion e-commerce opportunity, they are driving it” – SME News

Author: Saahil Goel

SME Day 2024: IndiaThe e-commerce market is experiencing explosive growth, expected to reach an astonishing $300 billion by 2030. This extraordinary growth is not a mere coincidence but a dynamic force driven by small and medium enterprises, which are the backbone of the Indian economy. The days of limited options and location hassles are quickly fading away. In a world where comparing prices on countless sites takes mere seconds, online shopping has become the go-to option for many people, eliminating the hassle of visiting multiple stores to meet their needs.

With over 700 million smartphones currently in use across India, affordable data plans and initiatives like Digital Indiadigital penetration has reached unprecedented levels, making convenience a top priority for consumers. With just one touch of a smartphone, consumers can enjoy a whole world of products – not only the general assortment, but those selected taking into account their preferences – delivered straight to their home.

Deeper e-commerce penetration is transforming the shopping experience in remote villages and second- and third-tier markets across India. Imagine a mother in a remote village accessing a world of products – from educational toys for children to the latest trends in sarees – with just a tap of her phone. In the past, residents in these areas faced significant challenges in accessing a wide range of products, often limited to local stores with limited selections.

Today, e-commerce platforms fill this gap by offering a wide range of goods from national and international brands. The convenience of online shopping combined with efficient delivery and reliable payment options has enabled consumers to enjoy the same shopping experience as in city centers. This widespread accessibility not only improves quality of life, but also stimulates the local economy, providing new business opportunities and supporting greater competition in the marketplace.

Remember the charming local shopkeeper who knew your preferences and shared anecdotes about his wares? Social commerce platforms like Facebook and Instagram have breathed new life into this tradition. Small and medium-sized businesses can now set up virtual storefronts, creating stories around their handcrafted products and innovative services. They can establish direct contact with customers, building a sense of community and trust. The growth of social commerce is not just about transactions; it’s about empowering the entrepreneur to become a storyteller, sharing the passion and heritage of their brand. This shift in consumer behavior, further accelerated by the pandemic, has ushered in a digital shopping revolution, and small and medium-sized businesses are the fuel driving it forward.

From offline to online: a journey of transformation

Ten years ago, the idea of ​​small and medium-sized businesses thriving online seemed like a distant dream. Many of them faced serious barriers, ranging from lack of digital skills and inadequate infrastructure to limited access to capital. The e-commerce landscape has been dominated by larger players, leaving little room for smaller companies to carve out a niche. Of all MSMEs engaged in e-commerce to date, only 12.7% did so between 2011 and 2015, indicating an initial reluctance among MSMEs to adopt e-commerce. However, this number almost quadrupled between 2015 and 2019 and has continued to rise since then.

The positive development is due to their determination and the wave of digital transformation supported by e-commerce enabling platforms, coupled with government initiatives such as Digital India and Make in India, SMEs have broken the barriers protecting digital commerce. The same entrepreneurial spirit that inspired the first trader to put a wheel on a cart is now driving shop owners in India to take their business online. With one click, products that were once out of reach are now easily accessible, making distances disappear virtually overnight. Affordable smartphones, widespread internet connectivity and digital platforms have enabled them to move from traditional operations to dynamic online businesses. Their success is a testament to their resilience and adaptability.

SMEs: the power of innovation

SMEs in India are more than just companies; they are beacons of creativity and ingenuity. Numbering over 63 million, small and medium-sized enterprises generate approximately 30% of GDP, account for 48% of exports and provide the livelihoods of over 120 million people. What sets them apart is their ability to innovate and adapt quickly, making them a major source of fuel for the Indian economy.

Whether you are a small craftsman combining traditional craftsmanship with modern designs or a tech-savvy start-up developing cutting-edge solutions, the commitment of small and medium-sized enterprises to innovation is inspiring.

Take for example Aadil Qadri who transformed traditional attars into contemporary fragrances, combining heritage with modern charm using his digital marketing expertise. Using technologies such as artificial intelligence, machine learning and blockchain, SMEs are not only keeping pace with the times, but also shaping the future. Their products and services meet local requirements and gain international recognition, demonstrating the enormous potential of Indian ingenuity.

Globalization: SMEs on the world stage

SMEs now reach audiences around the world. Indian SMEs sell products to the global market through international e-commerce platforms such as Amazon, eBay, Joom and Alibaba. Simplified cross-border trade regulations, international payment gateways and efficient logistics solutions have facilitated this global reach.

Consider the stories of Jaipur jewelry brands that started as small local businesses and now export handmade jewelry to the world. Kerala’s spice producers, who once supplied only local markets, are now indispensable to gourmet chefs and food enthusiasts in Europe and North America. These success stories attest to the transformative power of e-commerce in bringing Indian small and medium enterprises to the global arena.

We celebrate the role of small and medium enterprises in the future of e-commerce in India

The $300 billion opportunity clearly shows that small and medium-sized enterprises are not just participants in the digital economy; they drive it with innovation, resilience and a global perspective. A study by the Indian Council for Research on International Economic Relations (ICRIER) found that after e-commerce integration, almost 63% of small and medium-sized enterprises made new investments, of which over 40% were in software and employee training. This highlights their commitment to continuous improvement and adaptation.

Their story is not just about numbers – it’s about defying expectations. Traditionally, e-commerce has been dominated by larger players. But small and medium-sized businesses are taking up significant space in sectors that are often seen as strongholds of established brands. For example, a toy brand founded by a woman who came up with the idea of ​​educational toys that promote self-directed learning.

Another example is a comfortable loungewear brand. The founders, who came from a family business in Surat and were suppliers of major foreign brands, sought to create a distinct Indian brand. The company provided Indian women with access to luxury homewares and loungewear. These disruptions highlight their innovative spirit and ability to meet changing consumer preferences.

Looking ahead, the focus should be on further strengthening this digital transformation. By investing in infrastructure that bridges the digital divide in rural areas, supporting access to credit and financial services and providing targeted skills development programs, we can unlock the full potential of SMEs. The history of e-commerce in India is being rewritten, not by accident, but by the collective effort and ingenuity of its SMEs. This is a data-driven revolution with enormous potential for economic growth, job creation and a more inclusive digital future.

Saahil Goel is the CEO and CEO of Shiprocket. The views expressed are personal. Reproduction of this content without permission is prohibited.

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