E-Commerce Has Changed The Game for Small Businesses

Now is the best time for Indian MSMEs to go online



The pandemic because of COVID-19 has hit us hard. The resulting lockdowns during the pandemic caused 114 million people across the world to lose their jobs over 2020. The unemployment rate in India alone had touched a record high of 23.5 percent in May 2020 because of the national lockdowns. During this time the daily wage workers, street vendors, medium and small enterprises, and local retailers were the ones who had suffered the most.

During the initial lockdowns, the survival of Medium and Small Enterprises (MSMEs) was tremendously challenging. There were thousands of them who lost their hope despite that, there were many whose extraordinary stories of innovation and creativity helped them sail through in this darkness. When the world was shutting down many small and medium enterprises took their business games to the next level through the digital medium.


Exploring benefits of digital transformation for Indian businesses


Today the eCommerce industry has brought the world closer together. With the increasing smartphone penetration, the digital bazaar has spread its wings to Tier 2 and Tier 3 towns of Indian Cities as well. From Facebook’s marketplace to Instagram’s movement to go #VocalForLocal is creating opportunities for hundreds of small enterprises in this contactless mode of purchasing. According to a Crisil survey published in December 2020, the adoption of digital channels such as online aggregators or marketplaces, social media, and mobile marketing has increased from 29 percent of micro-enterprises using them before COVID to 47 percent as of November 2020. The eCommerce industry is no longer limited to those old-style websites. Today we have local home-grown brands in front of the customer right in front of their mobile screens with the most sophisticated pictures that include all the details and descriptions of the product. Let’s take a thorough analysis in understanding how small businesses are benefitting from the eCommerce revolution.


1. Tapping the untapped financial growth


a. Better timeliness of sales and marketing along with global client base has helped MSMEs to increase profits. With flexible backend services eCommerce has worked in the favor of MSMEs where they can easily use the third-party service providers with nominal investments for hosting online stores. The services may also include packaging, transportation and logistics, warehousing along with other facilities. This increases the profit margins by reducing investments.


b. Reducing expenses on marketing and distribution costs through digital media is playing a vital role where MSMEs are finding their right audience. Small enterprises can save a lot through digital exhibitions, virtual trade shows, and online advertising these days. In addition, digital channels provide a cost-effective space to advertise and connect with larger target groups. Influencer marketing is the latest in trend. The attractive discounted offers on bulk purchases and tie-ups with different banks help in captivating more and more customer footfall.


c. A sound record of online transactions and timely accomplishment of quarterly and annual targets in log-books is one of the most valuable assets that a business can have to build a global reputation. Online transactions help in creating an auditable history even for a small enterprise. From consumers to financial institutions, they all rely on reliable financial data points for identifying solid businesses to invest in and support growth.


2. Applying the game of Analytics


a. John Owen rightly said that — “Data is what you need to do analytics. Information is what you need to do business.” Because of the amplified competition, eCommerce players are heavily spending on digital solutions to improve site traffic, gain customers and followers, establish genuine customer relationships for advancing their sales. The advanced eCommerce technology solutions provide knowledge-based explanations to improve customer acquisition.


b. The eCommerce analytics on customer data works on parameters including products, prices, and technical details accessed, time spent on every page, orders placed, and purchases made over a period. This information helps in gaining valuable insights by providing faster response to customer demands and better after-sales service to lock in a loyal consumer base.


3. Time to go Global for Local


a. eCommerce has helped SMEs scale up not only at the local level but has even achieved global recognitions. We see global icons like Priyanka Chopra promoting women-led small enterprises from India on her Instagram account that has millions of followers from across the world. Do you know the hidden potential here? Celebrity endorsement and promotion actually act as an external cue empowering consumers to comb out through the huge brand clutter present in the market promoting the product’s credibility factor. In short, one shout-out to the worthy business can be a real game-changer for the small company.


b. Through international eCommerce portals today local businesses in India are finding their place in Etsy stores worldwide. Nitin Gadkari, the minister for roads, transports, and highways in India during the launch of Amazon Exports Digest in 2020 said that — “The presence of over 60,000 Indian MSME exporters on Amazon’s Global Selling program is a strong indicator of the potential that e-commerce exports hold for India.” Apart from the global outreach to its customers, eCommerce platforms are providing MSMEs with an opportunity to deal with manufacturers and suppliers for making effective long-term contracts as well.




Experimenting with the various permutations and combinations today in this tough pandemic time the physical retail has unified beautifully with the ever-developed digital world. The 2021 Global Payments Report by Worldpay FIS highlights that mobile shopping will drive India’s e-commerce market, projecting it to grow 21 percent annually over the next four years. So, believe it or not, but the shop floor is now in the hands of customers and they do expect the same shopping experience whether they are purchasing in a mobile app or in the real world. The revival of the MSME industry through digital transformation will showcase a new journey of India’s sustainable economic growth globally.


Written as part of Blogchatter’s campaign #ECommerceInnovation. Read more posts in the campaign here.

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