How e-Commerce is Fueling The MSME Growth in India MSMEs are the driving force of the economy for the country, backed by the strong connectivity of e-Commerce
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The MSME sector is one of the fastest-growing segments in India, however, MSMEs faced significant limitations in their market reach, primarily confined to their local regions in earlier times. e-Commerce platforms revolutionised this landscape, enabling MSMEs to expand their operations and tap into global markets. Affiliate marketing channels have played a pivotal role in driving the growth of MSMEs. e-Commerce giants frequently collaborate with affiliate marketers to enhance their return on ad spend (ROAS).
e-Commerce platforms have transformed the way MSMEs operate by providing unprecedented access to a global market, breaking down the geographical barriers that once limited their reach. Whether offering handmade crafts or specialised industrial goods, these businesses can now connect with customers worldwide who have specific interests, driving significant growth in sales. One of the most notable benefits of e-Commerce is the reduction in operational costs. By eliminating the need for a physical storefront, MSMEs can save on expenses like rent, utilities and labour.
"The digital adoption rate among MSMEs in India is increasing. Currently, a significant portion of MSME sellers, approximately 70 per cent, are connected to the internet. This trend is indicative of a growing awareness of the potential benefits of online platforms for business growth. As internet penetration continues to rise, it is anticipated that this figure will reach 80 per cent by 2027. This surge in digital adoption will further empower MSMEs to leverage online channels to expand their market reach, improve efficiency, enhance customer engagement & strategize to lower acquisition costs," said Rohan Bhargava, co-founder of Cashkaro and EarnKaro
MSMEs have long been the backbone of the Indian economy, employing nearly 62 per cent of the workforce and accounting for approximately 45 per cent of its exports. Driven by a strong entrepreneurial spirit, this sector thrives across both bustling cities and remote villages, fueling innovation nationwide. The digital revolution, along with the emergence of e-Commerce platforms like ONDC, holds tremendous potential to further empower the MSME sector.
Kanishk Maheshwari, co-founder and managing director, Primus Partners commented, "e-Commerce platforms must go beyond merely providing a marketplace; they should offer personalised support to help MSMEs build capacity. This support should focus on areas such as product pricing, market competition, branding, cataloguing, packaging, sourcing materials, reducing manufacturing costs and understanding institutional, financial and legal compliances. Alongside this, it is crucial for MSMEs to enhance their digital literacy and understanding. Digital transformation is vital for their success, and adopting ERP solutions can improve manufacturing efficiency, expand market access and reduce time to market. The Government of India and the Ministry of MSME are developing a new scheme for ERP and digital transformation, which states must implement effectively to foster MSME growth."
Sudeep Sen, vice president, GI Group Holding, also chipped in by stating,"The e-Commerce Industry in India is poised for significant growth, with a projected compound annual growth rate (CAGR) of 27 per cent by 2028. This surge translates into a soaring demand for roles such as product listing, order management and customer service. Order management systems (OMS) are pivotal in enabling retailers to oversee the entire back-end process of online order fulfilment seamlessly. By leveraging a modern OMS powered by e-Commerce order processing software, retailers can efficiently manage inventory, coordinate sales across multiple channels, initiate fulfilment tasks, print shipping labels and process returns, driving the need for skilled professionals in these areas."
MSMEs play a crucial role in India's economy, contributing around 30 per cent to the GDP, according to the MSME Ministry's FY23 annual report. The conducive business environment in India, coupled with the availability of essential resources, has facilitated the growth of MSMEs in the e-Commerce sector. This expansion has spurred demand for packaging, printing and fulfilment services, consequently creating job opportunities within these industries. As the demand continues to grow steadily, there remains a consistent need for hiring to meet the escalating requirements of businesses, fueled by MSMEs expanding their online footprint. Read more
