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E-commerce Empowering SMEs

14 Apr 2021

Digital transformation is no longer a trend or buzz phrase. It is rather the evolution of how business is conducted in the digital age. 

Consumer preference is shifting from shops, supermarkets, and shopping malls to online marketplaces for the purchase of products, ranging from basic commodities to branded goods. The pandemic accelerated this shift in a more pronounced manner, as online provided them a larger selection of products, and they could shop from the safety of their homes. With Work from home continuing, e-commerce continues to provide the convenience needed by the consumers, even as we witness different waves of the pandemic. 

Digitalisation or digital transformation today appears as the only way to progress given the current scenario. E-commerce can positively impact our businesses, and open new doors for local entrepreneurs and Indian SME. By adopting e-commerce, Indian SME can leverage the online e-platform for becoming more competitive. For this, it is necessary for industry and Government to collaborate to maximize the impact of electronic commerce in the country.

Going by experience, e-commerce has empowered many MSMEs to digitise, tap consumer demand for online shopping, and create brand identity. This has contributed towards making possible to export in small quantities and seek consumer feedback to test the market in advance. It also enables small businesses to keep pace with competitors while providing new sources of much-needed revenue as well. Many small businesses are also associating with e-commerce as partners in the supply chain and delivery networks.

From our experience of the previous wave of COVID-19 cases, we also know that e-commerce is essential for citizens to continue to access basic needs during these difficult times. Delivery personnel should be notified as frontline workers so that they can serve customers without any fear, and citizens can continue buying things they need from the safety of their homes.

E-commerce being an undoubtedly more efficient platform for doing business, as it could easily tap the untouched geographies, and the cost of doing business via e-commerce is low, which indeed creates a win-win situation for company and customer, and also helps women entrepreneurs to operate businesses from home, while still taking care of their domestic responsibilities.

Many e-commerce marketplaces are working to empower rural artisans & weavers and women entrepreneurs to scale. Whether it is having a larger reach for their creations or demanding a better price for their crafts, these online platforms have enabled rural artisans to continue their occupations in difficult circumstances.

Estimates suggest that India has over nine million artisans. Many of them are set up as cooperatives and community-based organisations with limited reach. E-commerce can also enable the documentation of traditional art and craft. 

CII has put forth a few policy recommendations for further facilitating this connect via e-commerce as follows:

Export refund to be removed
Cogency approach to be followed while creating policies to avoid the conflicts
Government is to quickly adapt to the new way of business i.e. e-commerce exports 
Need to digitize and interconnect the compliance management systems to ease the process to transition to e-commerce 
Need of collective approach from Government, Industry, MSMEs, and entrepreneurs

With a facilitative framework in place, India’s presence in the digital transformation era and exports can be deepened through the e-commerce route.