Leaving behind big eRetail giants, Indian SMEs growls high!

Segregating itself from the term 'un-organised', the SME industry is set to fill the voids of retail in the country.
SME Retail

While 2015 was expected to be ‘THE’ year for eCommerce giants in India, companies such as Snapdeal and Amazon India couldn’t really capitalise on the enormous opportunity. In a race to lure more customers, these online marketplaces at the first place burnt huge cash and also did lose a handsome amount of market share.

According to a report released by Morgan Stanley earlier this month, Snapdeal’s and Amazon’s market share in terms of gross merchandise value dipped at 26% and 12% respectively in the year 2015 in comparison to that of 32% and 15% in 2014.

However, domestic eCommerce major Flipkart managed to slightly increase its shares. Despite such huge fallout, the top 3 eRetail majors accounted for more than 80% of the total market share.

A Morgan Stanley research report released earlier this month pegged Snapdeal's and Amazon India's market share in terms of gross merchandise value at 26% and 12%, respectively, in 2015. A similar report published by the same firm last year had estimated the shares of these two companies at 32% and 15%, respectively, for 2014.

Flipkart somehow managed its number one slot with an increase in share from 44% to 45%. This has resulted in a combine slip of India’s top 3 eCommerce portals from 91% to 83%. Notwithstanding the trend, online payment turned eCommerce portal Paytm remains steady with a 7% market share. In the midst of such gigantic drops, it’s the small medium online businesses which saw a huge jump from 2 to 10% in terms of market share.

With Indian government, giving its best to uplift the small businesses in the country, the online industry is too growing in a more democratic manner, same like Europe. Small businesses are always considered to be the engine of country’s economic growth, and segment has shown significant growth over the past decade. Segregating itself from the term ‘un-organised’, the SME industry is set to fill the loopholes of retail in the country.

Spokesperson from one of India’s consultancy firm believes that, unlike other Asian market, India market will not just be restricted to big players of the industry. The country, in the coming time will be a fix-blend of various vertical players.

With companies like Google India aiming to help small medium enterprises to go online, small scale businesses are now totally geared up to nab a larger pie of the market. eCommerce in India is surely on an unprecedented growth trajectory and even the ‘down-towns’ of the country is picking up the digital trends very well. This gives SMEs a tangible opportunity to emerge as a potential retail segment in the coming days. SMEs/ MSMEs has the potential to fuel the growth of the Indian economy as it also make a significant contribution to country’s export and industrial output.

Research and analytics firm Technopark is of the firm opinion that, the scaling of SMEs in the country is beneficial for eCommerce as the space is all set to see several players coming in from different formats of retail. With this road to success for big eCommerce giants such as Snapdeal and Amazon will get tough.

Many industry pundits are of the opinion that the eCommerce giants in the country might lose more shares because of the plodding reduction in discounts to improve their balance sheets and earn profits.

Looking at the current numbers, there are more than 48 million SMEs operating in the country which contributes around 17% to India’s GDP. New entrants in the sector is growing at a significant pace of 23 % in manufacturing sector and 31% in services sector. Increasing internet penetration across the nations has proven to be a game changer for all businesses in the country and SMEs are surely betting big on this. Creating an online presence is not just to increase their numbers but also to create quicker response to customers inquires, provide active order taking processes and a seamless after-sales service. This will surely make their prospects into a loyal consumer base and eventually turn them into a stronger brand advocates.

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