E-commerce —the force multiplier for MSMEs

The growing e-commerce market in India is playing a catalytic role in achieving the government’s vision of catapulting India’s GDP to $5 trillion in five years. One of the most effective outcomes of this digital transformation process is visible in the way it is helping Indian MSMEs to go from strength to strength. Revenues, margins, and growth rate for MSMEs are higher than ever before, and so is their user base. Thanks to e-commerce, market access for them has improved by leaps and bounds while customer experience is now substantially improved.

E-commerce platforms and MSMEs today share a very strong bond, each one’s strengths playing out remarkably well for the other. MSMEs have been the bulwark of India’s enterprise for decades, relying on limited resources while providing jobs to semi-skilled and unskilled labour. Despite limited access to technology and finance, they have kept the engine of India’s industry going while also playing a small yet crucial role in ensuring social peace and harmony. The advent of digital commerce breathed new life into the MSMEs. Like they often have, MSMEs have played a stellar part in leveraging the new opportunities digital commerce has offered.

As the collaboration between MSMEs and digital commerce platforms grew, other stakeholders played their part too. The government adopted a flexible and light-touch regulatory approach that served as a great guiding light to innovate in an evolving regulatory landscape. MSMEs began to appreciate that embracing e-commerce could only help them grow, a contrast from the doomsday many predicted. Digital platforms also started understanding MSMEs’ problems. Flipkart, on its part, has tried to address some of them. The decision by the GST Council to exempt small businesses from mandatory registration on e-commerce platforms is very commendable. This decision will encourage MSMEs, small businesses, cooperatives and SHGs to access digital markets via e-commerce and provide a boost to the digital India agenda of the country besides helping these small businesses grow & prosper.

The company is committed to transforming commerce in India through technology and introduced innovations like Cash on Delivery, No Cost EMI, easy returns and many such customer-centric innovations.

Flipkart has been committed to contributing to the inclusive economic growth of the country by connecting sellers/MSMEs, artisans, Indian farmers, women entrepreneurs and other under-served communities to a nationwide customer base, creating employment and upskilling opportunities for thousands across the state.

Under its Samarth program, launched in 2019, Flipkart has brought thousands of artisans, weavers, and handicraft producers online with a special focus on women-led enterprises and differently-abled entrepreneurs. Under the program, Flipkart’s team offers its assistance end-to-end, from basics of online selling to constant counsel on market intelligence and consumer insights. Sellers also receive guidance on trending selection and emerging trends to understand what is needed to meet consumer demand. The program currently impacts more than a million livelihoods, including artisans, weavers, and craftsmen across India and is working towards supporting more such sellers through the initiative.

Flipkart, through its ongoing efforts, has also trained over 10,000 farmers in India so far, through farmer producer organizations and self-help groups to build capacity and to help them scale their offerings through technology and e-commerce and bring rural prosperity.

Flipkart has made online shopping more accessible and affordable by leveraging technology and AI-based solutions like regional language interfaces, voice assistants and chatbots for millions of Indians by working closely with the MSMEs in India. Flipkart has also leveraged AI-driven personalisation to enable a tailored e-commerce experience.

Today, Flipkart makes payment to MSMEs within days of the receipt of the order. Micro entrepreneurs get support from Flipkart through small ticket instant loans with minimal documentation, automated underwriting and an auto lending program. It facilitates quicker credit to MSMEs through its lenders. This is particularly helpful to those MSMEs who still find it difficult to get capital from the banking system. It frees up their capital to invest in expanding capacities, improving factories and overall hygiene.

The government’s push through JAM (Jan Dhan, Aadhar and mobile), along with the banking regulator and public and private financial institutions playing their role, has also tremendously helped in facilitating credit for MSMEs and thereby accessing more and better resources. There’s no denying that India’s digital payments system is the best in the world and that has contributed immensely to the growth of e-commerce in the country.

With utmost cooperation and a purpose-driven approach toward a larger good, digital commerce platforms and MSMEs are now aiming higher. According to the Ministry of Micro, Small and Medium Enterprises’ 2020-21 annual report, almost 58% of the over Rs. 1 trillion order value on the government’s GeM platform came from micro and small enterprises.

The rise of digital commerce has boosted not only MSMEs in the manufacturing sector but also those in services. Job growth for those providing packaging, delivery, plumbing, electrical, security and many such services has been phenomenal. It has also reduced the need to migrate to urban areas. As e-commerce enterprises reach the interiors of the country, many more youths are now able to secure jobs in their towns and villages, reducing the pressure on the over-populated cities. It has also created more social harmony, taking away the taboo from many jobs that people would earlier not do owing to family or societal pressures.

Flipkart has enabled millions of consumers, sellers, merchants, and small businesses to participate in India’s digital commerce revolution.

Flipkart launched Shopsy in July last year to encourage local entrepreneurship. By leveraging common messaging and social media to provide assisted online shopping, the platform has tackled issues around trust and navigation while shopping online. This is also helping in improving products and services as quality benchmarks could now come from anywhere and from the best, leading to better processes. A seller of apples in Shimla is now competing with their counterpart in Kashmir, and both are competing with an importer of Washington apples while the buyer could be in Chennai. The meaning of competition has thus changed while the competition is simultaneously local and global. Happily navigating that terrain is the partnership between e-commerce and MSMEs.

Disclaimer: This is a guest post by Rajneesh Kumar, Senior Vice President and Chief Corporate Affairs Officer at Flipkart Group. Previously, he was the SVP & Chief Corporate Affairs Officer and Director of Walmart India. Rajneesh has more than two decades of experience in people & organisation leadership, strategic planning & execution.