How E-Commerce Marketplaces Can Drive MSME Makeover

For the growth and development of MSMEs, e-commerce marketplaces are possibly the best enablers to lead their transformation at minimal costs, investment, and innovation.
How E-Commerce Marketplaces Can Drive MSME Makeover

Manufacturing is expected to be a major contributor to India’s growth saga. Manufacturing as carried out by micro-units, small units, and MSMEs, if adequately facilitated, can prove to be a game-changer in accelerating the economic growth, development, employment, overall income levels, and the efficiencies of supply chains.  To render MSMEs more sustainable and effective, not just automated production processes are needed but also multiple channels for accessing conveniently relevant markets and opportunities to be a part of national and global supply chains.  

For the growth and development of MSMEs, e-commerce marketplaces are possibly the best enablers to lead their transformation at minimal costs, investment, and innovation. Erstwhile, nations would resort to tactics like having guilds and traditional business centers for carrying out transactions through a single-window approach for the growth of business ventures. However, the world has come a long way since then, and now to compete successfully in big, established supply chains, companies need to invest in their digital overhaul and leverage modern technological solutions. In current times, digital empowerment is a critical differentiator. MSMEs cannot be future-ready if they aren’t digitally empowered. 
 
Apoorv Bhatt, CEO & Co-Founder, Eolstocks.com says, “E-commerce marketplaces are already driving MSME transformation across the country. They allow the smallest of the businesses to have access to the national market and sellers from tier II-IV towns can sell or liquidate their products online. The pandemic has made businesses realize the importance of digital transformation and MSMEs are going online at E-commerce marketplaces with minimal cost and investment. There is an increased focus on inclusive development in the country and the initiative, Atmanirbhar Bharat is providing many opportunities for small businesses. We even see MSMEs partnering with the e-commerce sector in supply and delivery networks”. 

Considering the Prime Minister’s vision of ‘Atmanirbhar Bharat’ and to be more ‘vocal for local’, India is now focused on achieving inclusive development that enhances livelihoods. E-commerce marketplaces can contribute incredibly to achieving this vision. These marketplaces enable products even from hinterlands and remote locations to reach the national markets, in turn providing large-scale opportunities to artisans and small sellers hailing from tier II and tier III towns and cities to sell their goods online to consumers beyond their local catchment areas. 

The Indian e-commerce sector is estimated to cross $80 billion by 2021 and $300 billion by 2030, already changing how small and medium-sized businesses operate in India. By adopting e-commerce, MSMEs can achieve significant advantages in their business operations such as increased revenues and margins, better market reach, access to new markets, higher customer acquisition, cost savings in marketing spend, and enhanced customer experiences.  

Rajiv Kumar, Founder & CEO of, StoreHippo states, "With the ravages of the ongoing pandemic, businesses have to quickly think of ways to change and gain their lost foothold in the market. E-commerce marketplaces are helping MSMEs add new sales channels and sell better in new markets by quickly building up a strong vendor/distributor network. Online marketplace model powered with a cutting-edge technological solution like StoreHippo gives a cost-efficient solution and level playing field to MSMEs. With a combination of hyperlocal e-commerce solutions and a streamlined supply chain, MSMEs online marketplace can easily become local bestsellers and gain loyal customers."

By investing hugely in supply chains, e-commerce ecosystem provides ample opportunities for MSMEs to become a partner in supply and delivery networks. Start-ups and relatively new young brands are also able to build national brands, and in some cases, are even charting global waters. Additionally, numerous offline stores are adopting e-commerce to leverage the opportunities created as conventional and modern retail models move towards online and offline collaborations.  

While many of the MSMEs in India may not have their own online presence, such as a website, yet 43 percent of these enterprises participate in online sales in India. In general, the web-enabled MSMEs make more profits, enjoy an enhanced customer outreach and more employment opportunities. Reports have shown that nearly 56 percent of MSMEs believe that the use of digital technologies has become imperative for overall business growth and expansion.   

Jitin Chugh, Co-Founder, Hokosoko.com says, “MSMEs if effectively facilitated will prove to be the game-changer in boosting India’s economic growth, generate employment and improve income levels. Need of the hour for MSMEs is to have channels for accessing greater markets and have the opportunity to be a part of national and global supply chains. E-commerce marketplaces can be the best enablers for them by empowering MSMEs to sell online to customers beyond their local catchment, allowing them to benefit from economies of scale. The E-commerce industry has also bridged the gap between metros and small cities, giving both MSMEs and customers from tier II/ III cities fair exposure. Well established supply-delivery network of e-commerce marketplaces will play a major role in shaping the future of MSMEs”.

E-commerce has the potential to enable MSMEs to grow and expand their businesses not just nationally but internationally as well. Research has shown that MSMEs that use the internet and related tools extensively are also able to export approximately two times more by export value as against the MSMEs that either doesn’t use the internet and e-commerce marketplaces at all or use them very sparingly.   

For MSMEs, e-commerce has rightly become synonymous with economic stability, growth, and security. E-commerce marketplaces enable even the smallest of MSMEs to showcase their products in any part of the globe without having to spend much on expansion or changing their location. These platforms have empowered small enterprises by eliminating their business hurdles, getting them a large customer base and hence, an increased revenue. 

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