Government says revised draft ecommerce rules soon

Source: Economic Times, 21 December 2021

The government is in the final stages of drafting new ecommerce rules, tweaking an earlier draft that had sought to tighten the regulations for foreign-owned marketplaces, including barring their affiliated entities from selling on the platforms and restricting flash sales.

The new version will be released soon, said a senior official of the Ministry of Consumer Affairs, Food and Public Distribution who did not wish to be named.

Top industry bodies representing the Tatas, Amazon, Walmart-owned Flipkart and others have opposed some of the proposed clauses in the earlier draft. Some of the key provisions have also not found favour with the finance and corporate affairs ministries, and the government’s public policy think tank, Niti Aayog.

Given the differences, the Department of Consumer Affairs has held discussions with several companies and industry associations on the proposed amendments, said the official.

Controlling commodity prices

The Ministry of Consumer Affairs, which also looks after food and public distribution, has been using data and predictive analytics to keep the prices of pulses under control for the past three months, the official said. The department has developed a price forecasting model to predict the prices of major pulses six months ahead of a possible spike.

The autoregressive integrated moving average with explanatory variable (ARIMAX) model uses estimates of domestic availability of commodities at mandis and imports, thereby predicting supplies months earlier.

How e-commerce is unlocking global trade for Indian businesses

Source: Economic Times, 24 November 2021

Jaipur-based Divya Gems and Jewellers’ owner, Leela Ram Bunkar, had a humble beginning as a craftsman before he capitalized on an opportunity to move his business to an e-commerce marketplace that gave him access to a global audience for showcasing his products. Today, he proudly services international clientele across continents.

Like Bunkar, millions of business owners have experienced a life-changing impact from selling online. The last eighteen months have redefined its importance and accelerated the pace of its adoption. Today, e-commerce is no longer a good-to-do; it has become a business imperative for ensuring continuity and growth.

COVID-19 has unlocked doors for global trade in innovative ways. According to Payoneer, global e-commerce revenue grew by over 80% in Q2 and Q3 of 2020, boosting online shopping across the world. The report also states that India is amongst the top 10 countries in cross-border e-commerce growth. Global cross-border commerce is fast emerging as the next big growth opportunity for the Indian e-commerce industry. As per Forrester Research, cross-border commerce is expected to grow at a CAGR of CAGR of 17.3% by 2022. It may see its market share in the global e-commerce market grow to 22% in 2020 from the earlier 15% in 2015.

E-democracy in e-commerce
Over the years, the general perception has been that e-commerce is an expected choice of marketing for only well-established retail brands. There has been a drastic change in the business strategy of local businesses who have been successfully navigating their operations to online platforms.

Direct-to-Consumer (D2C) brands and independent sales channels have been trending alongside e-commerce. Retail companies are doing away with distributors and middlemen and connecting directly with consumers through e-commerce platforms. This allows them to not only reduce costs and overheads but also get a closer understanding of their consumers’ buying patterns, deal with product enquiries and directly provide customer service. By offering enhanced customer experience, brands get deeper insights into their shopping behaviour. This allows D2C brands to customise their products for different markets catering to local cultural differences, and thus succeed in diversifying into different countries.

Key Factors Driving Cross-Border E-Commerce – Unlocking global trade for Indian sellers
With expanding digital access, consumers are today able to connect with sellers and retailers from international markets to tap into a wider choice of products with competitive pricing and quality.

The first key factor driving cross-border e-commerce is consumer preferences for the most relevant product no matter where the source. This fulfils the premise of an open marketplace as we saw in Bunkar’s case that cross- border e-commerce gives sellers’ access to millions of diverse buyers.

The second factor is the ability for sellers to manage fulfilment and complete transactions through a range of integrated logistics as well as payment on trusted open marketplaces that enable a frictionless experience. This gives immense confidence to small sellers and large retailers as well as buyers to participate in the cross-border ecommerce market thereby contributing to a vibrant two-sided marketplace.

These marketplaces provide equal opportunity to all types of sellers not just by providing integrated services but also deep insights on what to sell.

Lastly and most importantly, the evolving ecommerce ecosystem in India which includes the marketplace, logistics providers and government agencies need to work in close coordination to make Indian sellers’ competitiveness matches those of other cross border sellers from around the world.

Three key elements to make Indian seller competitive in global marketplace would be:
        Simplification & digitalization of export procedures to reduce delivery timelines
        Offering low-cost logistics solutions through India Post to be price competitive
        Favourable policies for India centric categories such as jewellery and ethnic wear.

As exports from India reached a high of $35.4 billion in July ’21, the momentum augurs well to capture the massive headroom for growth that exists. With strong long term growth projections cross-border e-commerce, it is time that Indian businesses focus their attention on going global.

How e-commerce can play a big role in boosting exports from India

Source: Economic Times, 18 November 2021

At present, exports contribute to about 20% of India’s GDP. However, considering the size of our economy, our manufacturing prowess, the growing share of MSME (Micro Small and Medium Enterprises) contribution to the economy, increased internet penetration and rapid pace of technology adoption – exports can play a critical role in economic revival post COVID-19. What is critical is to use technology and lower the entry barrier for millions of MSMEs across India to participate in export opportunities.

MSMEs contribute to over a third of the GDP of India while accounting for half of the country’s exports. They generate employment opportunities and currently employ almost 110 million people across the country, which is why they are aptly regarded as the backbone of the Indian economy. A laser sharp focus on empowering Indian MSMEs to leverage e-commerce and drive Indian exports can help us address the Prime Minister’s vision of ‘Atmanirbhar Bharat’ and support the rise of global D2C brands from India. MSMEs can benefit greatly from the opportunities that global trade offers. However, entry barriers like market access, navigating the complexities of cross border logistics and payments, large initial investments and an uncertainty of demand deters these businesses from realising their full potential.

This is where e-commerce exports can benefit Indian MSMEs. E-commerce exports enable businesses to sell directly to customers across the world. It helps businesses transcend boundaries and get access to a much larger pool of customers. It also provides an ‘easy to adopt and scale’ mechanism for MSMEs to grow their business outside India, without having any footprint locally in international markets and reducing dependence on intermediaries – bringing the ‘seller’ closer to the ‘customer’. As recently as 8 years ago, if an Indian MSME wanted to set up an exports business, they had to visit global trade fairs, book orders, figure out logistics and shipping and then wait for the payments to come in. Now all of this is achieved seamlessly, thanks to e-commerce. E-commerce creates a level playing field for any kind of business to access global markets. It dispels the notion that exports are meant for larger businesses that can make massive investments to take their operations overseas.

The rising popularity of ‘Made in India’ products has also given rise to innovative customer use cases for products. This includes customers replacing creamers in coffee with ghee or using printed bedsheets as beach throws. Indian products across categories are witnessing great demand in global markets, from traditional categories like textiles, herbal products, teas to newer sectors like toys, home and kitchen products and a lot more. Thousands of Indian MSMEs are already benefiting from this demand, helping them create a niche for themselves. Importantly, these businesses have a positive impact downstream on job creation and the economy overall.

The role that technology has played in transforming how business is done in the past 18 months has led to our optimism about the opportunity that e-commerce exports offer Indian businesses. With e-commerce exports, Indian businesses have an avenue to create an international identity for world-class products manufactured locally.

We believe that e-commerce can play a big role in making exports easy and accessible for lakhs of MSMEs across India and take the local innovation and expertise global.

Amazon inks pact with Gujarat government to drive e-commerce exports

Source: Economic Times, 07 September 2021

Amazon India on Tuesday said it has inked an agreement with the Industries and Mines Department of Gujarat government to help drive e-commerce exports from the state.

As part of the MoU (Memorandum of Understanding), Amazon will train and onboard MSMEs from the state on Amazon Global Selling, enabling them to sell their unique Made in India products to millions of Amazon customers across over 200 countries and territories, a statement said.

Amazon Global Selling helps companies launch their brands globally using the e-commerce major’s platform.

Amazon will conduct training, webinars and onboarding workshops for exporters from key MSME (micro, small and medium enterprises) clusters like Ahmedabad, Vadodara, Surat, Bharuch and Rajkot and others, the statement said.

The workshops will focus on sharing expertise and providing training to MSMEs about B2C e-commerce exports and selling to over 300 million people worldwide through Amazon’s 17 foreign marketplaces, it added.

These courses are designed to provide MSMEs with the knowledge and tools they need to launch their brands and expand their businesses internationally using the Amazon Global Selling programme.

“Gujarat has vibrant gems and jewellery, apparel and textiles and handicraft sector which is held together by lakhs of MSMEs. One of our key priorities has been to boost exports from Gujarat and through this partnership with Amazon, we aim to empower lakhs of MSMEs in Gujarat to embrace e-commerce exports,” Gujarat Chief Minister Vijay Rupani was quoted as saying.

It will help them leverage Amazon’s global presence to showcase their products to customers across the world, he added.

“MSMEs taking their local products to global customers will play a critical role in supporting the local economy and display the strength of the state’s manufacturing and innovation prowess. Our government remains committed to make Gujarat an attractive business and investment destination,” Rupani said.

Abhijit Kamra, Director (Global Trade) at Amazon India, said the partnership with the Gujarat government is a step towards elevating lakhs of MSMEs from across the state to a global level.

The Amazon Global Selling programme has already enabled more than 70,000 Indian exporters to cross USD 3 billion in cumulative exports, showcasing millions of Made in India products to customers across the world, he added.

“The programme is witnessing tremendous momentum with increasing interest from exporters across India. We remain committed to making exports easy for Indian businesses and empower them to tap into their true potential, thus contributing to the vision of an Aatmanirbhar Bharat,” he said.

Ahead of festive season, Amazon, Flipkart scale-up facilities across India

Source: Business Standards, 07 September 2021

E-commerce firms such as Amazon and Flipkart are strengthening their supply chain networks with the addition of new facilities ahead of the upcoming festive season. They are also scaling up their hiring initiatives to meet consumer demand.

The coronavirus pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency.

“For us festive season is one of the largest (events) in the country,” said Akhil Saxena, vice president, Customer Fulfilment, APAC, MENA and LATAM, Amazon, in an interview. “It is for the whole country whether it is retail or online commerce, where customers want to buy new selections, get deals and have a great shopping experience.”

These sellers would be bringing in new appliances and models of mobile phones, personal care items and personal computing products. “And for keeping that inventory we want to create the infrastructure,” said Saxena. “Ahead of the festive season, we will increase the storage capacity of the fulfilment network by 40 per cent.”

Amazon India plans to expand its fulfilment network in India, with a nearly 40 per cent increase in its storage capacity over the last year. With this expansion, will have more than 43 million cubic feet of storage capacity, across 15 States, supporting around 850,000 sellers across India.

“Ahead of this festive season, we’ve expanded the storage space in multiple states like Maharashtra, UP, Telangana, Tamil Nadu and Karnataka,” said Saxena.

The expansion is in line with Amazon India’s continued efforts to heavily invest in the country and create tens of thousands of direct and indirect work opportunities. Amazon India’s overall fulfillment network will be spread across a floor area of more than 10 million square feet. This is more than the land size of 125 football fields, housing millions of products from notebooks to dishwashers.

Also, over 11,000 offline retailers and neighbourhood stores from Maharashtra are now part of ‘Local Shops on Amazon’.With the upcoming festive season, Amazon is focused on helping Local Shops sellers grow their business and recover from the recent economic disruption caused by the pandemic.

Amazon has committed that it will create around 20 lakh direct and indirect jobs by 2025. It has already created around 10 lakh direct and indirect jobs. Deepti Varma, HR Leader, Corporate, APAC, and MENA, Amazon, said that even during the pandemic, the firm nearly created around 3 lakh direct and indirect jobs across technologies, content creation, retail, logistics, and manufacturing. Amazon said it is currently hiring for more than 8000 direct job openings across 35 cities in the country.

Last year, e-commerce firms witnessed blockbuster festive season sales. India’s online festive sale for a month — during October-November — raked in $8.3 billion in gross sales, including for brands and sellers, up by 65 per cent year-on-year, exceeding forecasts, according to a report by consulting firm RedSeer. E-commerce industry executives said that they are expecting to witness more growth than that this year.

Another major e-commerce firm Flipkart is also strengthening its supply chain network across the country with the addition of new facilities ahead of the upcoming festive season. These new fulfilment centres will help create deeper capabilities to support thousands of sellers, MSMEs (micro, small and medium enterprises), small farmers to cater to the growing customer demand. They would also create more employment opportunities while enabling faster deliveries for consumers.

“The expansion you do in a year becomes the benchmark for next year. There is a big jump in that this year and this is being filled from a supply chain perspective,” said an industry executive having knowledge about the demand witnessed by Flipkart. “The demand is coming back which would boost the economic activity and warehousing space and jobs on the grounds.”

Flipkart recently strengthened its supply chain network in Karnataka with the addition of three new facilities ahead of the upcoming festive season. These new facilities will serve sellers of large appliances, furniture, mobiles, apparel and electronics and are located in Kolar, Hubli and Anekal. The facilities are helping more than 10,500 sellers. The expansion will further contribute to the state economy and create additional 14,000 direct and indirect job opportunities, as the sellers get national market access for their products.

Recently, Flipkart also strengthened its tech-enabled supply chain network in Maharashtra with the addition of four new fulfilment and sortation centres to support local sellers from the state and cater to the growing demand for e-commerce. The new facilities located in Bhiwandi and Nagpur are helping create over 4,000 direct and indirect jobs. Apart from growing customer demand, this expansion comes on the back of a growing seller count from the state which rose by 30 per cent in the last year.

E-Retail has particularly been a boon during the Coronavirus (Covid-19) pandemic after the setbacks caused by widespread disruption (for consumers and small businesses) and loss of jobs. In the future, the e-retail market is expected to grow to $120–140 billion by FY26, increasing at approximately 25 per cent–30 per cent per annum over the next 5 years, according to the report ‘How India Shops Online 2021’ by Bain & Company in association with Flipkart.

The growth will be led by smaller towns that account for four out of five new shoppers. In addition to small towns, women and older shoppers have gained prominence in the online shopper base over the last year, and this trend is expected to continue.

Experts said as e-commerce companies are expanding their operations to penetrate deeper into the smaller towns, their supply chain and logistics considerably ramped up paving way for more seasonal hiring (about 25-30 per cent as per reports) across tier-2 and tier-3 cities.

India among most exciting markets globally, to grow to USD 1 trillion by 2025: Walmart CEO

Source: Economic Times, 25 August 2021

The Indian retail segment has its own uniqueness and the country is one of the most exciting markets globally that is poised to grow to over a trillion dollars by 2025, according to Walmart Inc President and CEO Doug McMillon.

Speaking at the Converge@Walmart event, McMillon noted that given the diversity of the Indian market, the company has to “think local and execute locally”.

“India is such a diverse market, it’s not one country in some ways and so we have to think local and execute locally, and it has its own rules, and so, we’ve got to comply with those rules,” he said.

McMillon added that currently, Walmart is not allowed to make a foreign direct investment in multi-brand retail (physical brick and mortar store) and so, the company operates in a different way.

“I do think we have seen and will see generation skipping in India, which will be exciting and some of that learnings, we will bring back to other markets that we have,” he said.

The top executive highlighted that India is one of the top three markets, along with the US and China.

The Converge@Walmart event is the flagship event of Walmart Global Tech India.

“We think the future is very bright, and we are going to see a market that is North of trillion US dollars by 2025, I believe. And the way that it is evolving is common in some ways with what we see in other countries, but has its own uniqueness, which makes it exciting,” McMillon said.

He pointed out that Walmart’s e-commerce unit Flipkart and digital payment firm PhonePe are both growing very well and have an “amazing number” of users.

“We are really excited about Flipkart and PhonePe leadership teams and our associates there and the businesses that are being built. The Flipkart business now has reached over 300,000 marketplace sellers, and the PhonePe business has more than 300 million users, which is just an amazing number and both are growing very well…,” McMillon added.

Flipkart competes with US e-commerce giant Amazon in the Indian market.

The Walmart veteran said the role of technology in all of Walmart’s markets, including India, is more important than ever.

“Companies that are born recently that are more digitally native have some advantages. It’s also true that in an omni-channel world, some of the older companies that may employ more people have more physical assets would have some advantages, but only if those older businesses – in our case an older larger business – have an openness, and an ability to change,” said McMillon.

However, he also said leading a digital transformation at scale is a real challenge.

“We operate in multiple countries. We have got some commonalities and our infrastructure and underpinning that needs to be modernised…,” he said.

McMillon added that the only things that are constant at Walmart are its purpose and values, and its associates will respond to change.

Walmart Inc owns a majority share in Flipkart. It had invested USD 16 billion in 2018, in the Bengaluru-based e-commerce platform. Post that, it has continued to participate in the two rounds of funding raised by Flipkart.

Recently, Flipkart had raised USD 3.6 billion that valued the e-commerce company at USD 38 billion.

Etail grew 25% in FY21, may grow up to 30% in FY22: Bain & Co

Source: Economic Times, 17 August 2021

Ecommerce in India grew by 25% to $38 billion in the previous financial year (FY21) despite two washout months during the first wave of the pandemic, according to a report by consultancy firm Bain & Co in association with Walmart-owned Flipkart.

While the second Covid-19 wave hit online sales harder, the industry is expected to clock between 25% and 30% growth this year as well, Shyam Unnikrishnan, partner at Bain & Co, told ET.

This will translate to around $47.5 billion by the end of FY22.

Since the onset of the pandemic, 30-35 million new customers have come online to shop in the country. Before the pandemic, there were around 100-110 million ecommerce buyers in India. This user base has jumped to 140 million and is on track to surpass the 150-million-mark in the ongoing financial year.

“Pretty much across most countries, you see a peak (in online shoppers) and it settles to be normal that’s higher than the pre-Covid times, and that essentially is being sustained,” Unnikrishnan said. “We expect something similar to happen here as well.”

The report pegs the e-tail sector at $120-$140 billion by FY26.

Unlike in 2020, the revival in online shopping this year has been gradual. Even though the industry has yet to bounce back to pre-second wave levels, Amazon India VP for consumer business, Manish Tiwary, told ET that business was fully back to those levels and non-metro markets were leading the growth recovery for the ecommerce marketplace.

Unnikrishnan also said growth in non-metro markets has been higher than in metros.

Small towns, women and older shoppers have also gained prominence in the online shopper base over the last year, he said, adding that this trend is expected to continue.

Arpan Sheth, senior partner at Bain & Co, said growth across categories in online shopping throughout the pandemic growth has been disparate.

“Mobile phones and other electronics categories witnessed a one-time growth spurt at the outbreak, however they did not see as substantial a jump during the second wave in April–May 2021,” he said.

According to him, frequent use categories such as grocery, household items, and personal care saw continued acceleration.

“Discretionary categories such as fashion and travel products saw relatively slower growth but are expected to rebound to pre-pandemic growth-rates soon,” he said.

ET has reported previously that sellers have also witnessed a similar trend in segments such as grocery, essentials and work-from-home related products as well as kitchen and home care. Fashion continues to be the most depressed category.

Aided by the pandemic, e-tail reach, including grocery, has gone up to around 4.6% in FY21 compared to 3.5% a year ago.

Excluding grocery, ecommerce penetration stands at 19%-20% compared to 11%-12% a year ago.

The difference in average selling prices in metros and non-metros continues to narrow, while rural markets are driving the growth revival.

Even as Covid-19 cases have come down drastically, consumers who moved online to order groceries and other essentials are staying back.

Companies like BigBasket, Grofers, Amazon India and Flipkart continue to see increased demand and are trying to scale up infrastructure to meet the steady growth in demand for essentials.

Earlier this year, ET reported that BigBasket, now owned by the Tata group, became the second vertical ecommerce platform to clock gross sales of over $1 billion. Prior to this, only Flipkart-owned Myntra had surpassed this milestone.

According to the report, online grocery was estimated to see 40% growth before the pandemic but actually grew by 80% in FY21.

Now, practically all ecommerce and grocery platforms are rolling out express delivery options to deliver essentials in an hour or less.

“There is significant headroom (for ecommerce). And we will see a lot of growth going forward and a lot of that growth will be propelled by small town India,” Unnikrishnan said.

The report said there has been a 1.5-2X growth rate in women shoppers compared to men in 2020 and a 20% increase in online shoppers who are over the age of 45.

Competition Commission approves Zomato buying 9.3 pc stake in Grofers India

Source: Economic Times,13 August 2021

The Competition Commission has approved online food delivery platform Zomato’s proposed purchase of 9.3 per cent stake in online grocery shopping player Grofers India.

Zomato, last month, said it has invested USD 100 million (around Rs 745 crore) for acquiring a minority stake in Grofers as the company looks to have more exposure to the online grocery segment.

The recently-listed Zomato will acquire 9.3 per cent stake in Grofers India Pvt Ltd and Hands on Trades Pvt Ltd (HoT). Grofers International Pte is the holding company of Grofers India and HoT.

In a tweet on Friday, Competition Commission of India (CCI) said it has cleared the “proposed acquisition by Zomato of approximately 9.3% stake in Grofers India and Hands on Trades”.

Zomato was incorporated in January 2010 while Grofers India was set up in May 2015.

HoT is into the business of B2B wholesale trading with third party merchants, contract manufacturing of food products, grocery and other goods for the purpose of onward sale on a wholesale basis, and providing warehousing services, including storage of food products and grocery goods to third party merchants. It was incorporated in September 2015.

Under the transaction, Zomato would snap up around 9.3 per cent stake in “each of Grofers India and HoT along with certain rights in each of the targets,” as per a notice filed with the regulator.

The notice mentioned about potential relevant markets and segments where the activities of the parties overlap.

Such markets include those for supply of groceries, household items, general merchandise, personal hygiene products, fruits and vegetables in India as well as the narrower segment of B2B supply of groceries, household items, general merchandise, personal hygiene products, fruits and vegetables in the country.

Another potential relevant market is the one for services provided by online platforms for the sale of groceries, household items, general merchandise, personal hygiene products, fruits and vegetables in India.

“The parties submit that the potential relevant markets/ segments identified above are highly fragmented with the presence of multiple players, including several unorganised players, who will continue to impose significant competitive constraints.

“The proposed transaction will have no impact on the competitive landscape in any potential relevant market in India, in any manner,” the notice said.

The parties are Zomato, Grofers India, HoT and Grofers International.

“It (grocery) is a large opportunity. The online grocery is nascent right now but is growing rapidly not just in India but across the world… We are actively experimenting in that space and recently invested USD 100 million for a minority stake in Grofers, with the idea of getting more exposure to that space and building our strategies and plan around that business,” Zomato CFO Akshant Goyal said in July.

Indian FMCG industry clocks 37% value-based growth in Apr-Jun quarter: Report

Source: Economic Times, 12 August 2021

Indian FMCG industry recorded a 36.9 per cent value-based growth in April-June 2021, the quarter hit by the second wave of the pandemic, over the corresponding period a year ago, data analytics firm Nielsen has said. However, when compared with this year’s January-March quarter, the industry saw a 2 per cent drop, it added.

E-commerce grew in the double-digit in the April-June quarter and traditional trade channels like grocers and chemists remained buoyant in the quarter, according to FMCG Snapshot released by NielsenIQ’s Retail Intelligence team.

Indian FMCG firms were largely immune to the second wave of the Covid pandemic, the report said.

In the comparative April-June quarter last year, the market faced a nationwide lockdown imposed by the government to tackle the spread of Covid-19 and then subsequent easing of restrictions happened in phases.

According to the report, during April-June of 2021, “rural markets continued growth buoyancy with strong tailwinds on the back of good monsoon and affirmative actions from the government. The metropolitan (top 52) cities also saw a significantly lesser impact in wave two, as compared to what was witnessed in the COVID-19 wave last year.”

“Traditional trade channels like grocers and chemists remained buoyant in the quarter; metros, in particular, had a strong ally in e-commerce to sail through the troubled waters,” it added.

Moreover, prioritisation of the assortment of brands and SKU range was a clear trend that emerged in the quarter. “We see that trend intensify in AMJ’21 (April-June),” it said.

Moreover, during the quarter as the supply chain was facing constraints, retailers continue to respond with evolved and optimised stocking behaviour.

“Two trends were observed in terms of the retail stocking – one, expansion of assortment width (number of categories per outlet) continues. Secondly, assortment depth (number of variants and associated quantities in stock) is being optimised,” it said.

This signifies that retail shelf space is getting more competitive and the call for action for manufacturers is to identify the right variants, by markets, and finding optimum frequency for servicing retail outlets.

Sourcing the Consumer Confidence Survey by the RBI, the report said due to the strained macroeconomic indicators, the consumer confidence indicated by the future spending index hit an all-time low — close to May’20 of last year when wave one was at its peak.

“However, the growth momentum in India’s FMCG industry that was building up in the preceding quarters did not see any major setback with the sudden onset of Wave two. When indexed to pre-covid times (Q1’20) the industry largely continued to remain at similar levels,” it said.

SMEs go digital due to Covid pandemic, see spurt in sales: LocalCircles survey

Source: Economic Times, 04 August 2021

Small and medium enterprises (SMEs) that went digital during the Covid-19 pandemic have seen tremendous spurt in their revenues and profits, a LocalCircles survey said Wednesday.

In last 12-months many SMEs were forced to adopt digital strategy as their revenues got impacted due to Covid pandemic and the lockdowns that followed across India.

“The COVID pandemic brought challenges for many small businesses in India and some of them had to literally initiate or expand their digital presence within a few weeks of the pandemic for their survival. Those in the direct-to-consumer domain, many of them started their own websites/apps, listed their products on eCommerce platforms or did both,” LocalCircles survey said.

As per the survey about 60% small businesses said that their online channels helped them find new customers for products and services as well as increase transactions with existing customers during the pandemic.

“Of those small businesses selling online, 61% are doing so via ecommerce platforms while 31% are doing so via their own websites and apps. And 57% MSMEs & startups who sell or transact online have concerns about key clauses in proposed ecommerce rules; Want compliance exemptions if annual turnover is less than Rs 5 crores,” the survey said.

About 10% of the respondents said that the digital strategy helped them find new customers for products or services. Another 10% said it helped them increase number of transactions with new and existing customers and and another 10% said it helped keep in touch with customers for overall customer satisfaction, the survey said.