Technology for MSMEs: Several factors drive India’s impressive economic growth story. One of the key components is the micro, small and medium enterprises (MSMEs) that form the backbone of the economy. These enterprises spread wide across the nook and corner of the nation, with most of them based in small towns and cities, contribute around 30 per cent to India’s GDP. Additionally, 40 per cent of India’s exports also come from MSMEs, wherein sectors like garments and coir occupy a fair share.
Given their potential and humongous numbers, the government is focused on encouraging MSMEs to build a strong credit history. More recently, in the Union Budget 2023, to alleviate stress for small businesses, Finance Minister Nirmala Sitharaman announced a Rs 9,000-crore corpus for a revamped credit guarantee scheme. Furthermore, according to the Economic Survey 2022-23 tabled in Parliament a day before the budget, as on November 30, 2022, 1.2 crore MSME units availed the Emergency Credit Linked Guarantee Scheme (ECLGS) and raised collateral-free resources to the tune of Rs 3.6 lakh crore.
Owing to efforts of the government like the focus on local (Swadeshi), easing of MSME definition and cheaper credit and e-commerce platforms sourcing more from these units, many of them have grown in size. These efforts have also translated into India having over 84,000 recognized startups as of November 2022, nearly 186x since 2016. While government schemes are enabling MSMEs to keep their financial potential afloat, e-commerce platforms are supporting them by expanding their reach to pan-India customers.
MSMEs look at business growth with hyper value platforms
The Indian e-commerce sector is likely to expand in different markets. Over the next five years, the Indian e-retail industry is projected to exceed ~300-350 million shoppers, propelling the online Gross Merchandise Value (GMV) to $100-120 billion by 2025. As a holistic ecosystem that includes various components of a successful e-commerce network such as logistics, payment, technology infrastructure, and customer engagement, it is well-equipped to provide a conducive environment for growth to the MSMEs. Consequently, this has provided budding entrepreneurs across the nation with a platform to connect with more consumers and expand their businesses.
Hyper value platforms have been key for onboarding MSME owners onto the e-commerce universe empowering and encouraging these entrepreneurs with easy business opportunities and an expansive customer base across the country – increasing the growth opportunity through e-commerce. Most hyper value sellers hail from Tier 2 and Tier 3 regions of India and looking at newer avenues online to do business.
At the same time, most consumers shopping on these platforms are first-time online shoppers. This gives sellers a chance to offer something for everyone that too with incredible offers and deals on a wide array of products across different categories to serve consumers’ shopping needs. Besides helping small businesses reach a wider customer base, this medium also offers affordability. With products provided at sale-like prices throughout the year, make it the go-to shopping destination for every Indian customer who typically waits to shop only during sales.
The road ahead
Given its resilient nature, the Indian economy is experiencing some good momentum. In modern India, micro entrepreneurs are strengthening the backbone of the Indian socio-economic landscape. While 95 per cent of MSMEs are in the micro-segment and 4 per cent in the small and less than 1 per cent in the medium, women-owned entrepreneurs form 20 per cent of all MSME businesses in the country.
In fact, the rise of micro entrepreneurship has instilled a sense of purpose, especially among women sellers in Tier 2 & Tier 3 regions of India, thereby affecting the next generation and their growth. Moreover, it not only improves their livelihood but also creates jobs. For instance, an estimated 13.5 million to 15.7 million women-owned and controlled enterprises are creating direct employment for 22 million to 27 million people in India
From offering employment opportunities to giving consumers, especially those in Bharat, an opportunity to fulfil their shopping needs online, MSMEs are poised to be one of the many shapers of India’s bright economic future.
Adarsh Menon is the Senior Vice President & Head- New Business, Flipkart. Views expressed are the author’s own.