India is expected to have close to 10 million online sellers by the end of 2020, with a potential value of $700 billion, according to a Walmart study.
India is expected to have close to 10 million online sellers by the end of 2020, with a potential value of $700 billion, according to a Walmart study. This will be driven largely by SMEs, small merchants and freelancers. This segment is slated to contribute as much as 40% towards future revenue generation and economic growth. As a result, it would not be wrong to view SMEs as the main drivers of growth in the country today. Studies conducted by KPMG indicate that the total exports from micro, small and medium enterprise was close to INR 6 lakh crore and this growth was driven by jewelry, apparels and consumer electronics. Small merchants are also leveraging the untapped global demand for fine chemicals, engineered products etc.
The internet has been the primary driver which has helped buyers and sellers across the globe to connect and collaborate. With the help of technology, sellers are able to customize their products to meet the demands of this global market. For eg: A homemaker could sell homemade pickles to an international audience, while a small shop in Bareilly in UP could take orders from global consumers to manufacture footballs.
Building a secure payment eco-system is key to enable growth for this segment. Hackers and fraudsters have also kept pace with these developments to circumvent and break into systems just as effectively. Traditionally, sellers and buyers used bank transfers for all transactions which would take a few days to get processed. This delay affected small sellers and freelancers as they operate with a smaller capital base and hence cash flow is critical.
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Buyers and sellers now span continents and therefore different time zones, prompting them to transact almost around the clock. Digital payment solutions have kept up with this pace and have hence empowered merchants, across the globe. As the financial industry continues to grow today, digital payment is becoming a watchword in the country’s economy. With end to end security and a two-way communication module, SMEs are set to emerge as prime contenders in the global market, all thanks to the innovations of digital payments solutions.
Written By- Narsi Subramanian, Director, International Spends & Sole Proprietors, PayPal