Ease of Doing Business for MSMEs: The assumptions of small and medium enterprises (SMEs) about operating their business is at odds with their customers’ preference, found the survey by the express transportation company FedEx (Federal Express Corporation).
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Almost 85 per cent of the Indian SMEs that sell on online marketplaces believe that their customers prefer faster deliveries over the firm’s sustainable practices. In addition, 80 per cent of respondents think that their customers favour reduced shipping costs over quicker deliveries.
In contrast, 70 per cent of consumers in India expect their SME merchants to deliver fast but also embed sustainability in their online shopping journey.
The online survey was done in the month of July 2022 across 11 markets including Australia, Hong Kong, India, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. Around 300 SMBs who had adopted online selling during the covid pandemic were surveyed in each market along with 5,000 customers out of which 1,000 were polled in India.
It is interesting to note that India was the top geography amongst Taiwan, Hong Kong, and Malaysia where consumers placed emphasis on sustainability over delivery time.
“Sustainability is no longer an optional extra for SMEs interested in expanding their e-commerce businesses. Consumers increasingly see it as an essential and non-negotiable part of their decision-making process,” said Kawal Preet, President of Asia Pacific, Middle East & Africa (AMEA), FedEx Express.
No wonder 80 per cent consumers prefer to buy from companies that have a comprehensive environmental, social and governance (ESG) strategy built into their business while only 38 per cent SMEs confirmed having one.
The reasons given by SMEs for the delay in adoption of ESG compliances are the increased cost of sustainable business practices and the belief of not generating enough return on investment in this area.
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“Today, consumer consciousness towards the environment exerts a stronger influence on the way they perceive a brand, making it imperative for businesses to embrace an effective ESG strategy,” said Kami Viswanathan, Senior Vice President of FedEx Express Middle East, Indian Subcontinent and Africa Operations.