As the nation went into lockdown for almost six whole months owing to the pandemic, India witnessed disruption at an unprecedented scale. With the delivery of only essential supplies being allowed in the initial phase, a large part of the SMB segment hit the distress button. The stringent lockdown rules across regions and immense apprehension among consumers to step outside and shop for essential goods compelled the nation to ramp up on e-commerce.
Looking at the year gone by, given below how ecommerce has helped SMBs grow despite the pandemic and emerge stronger than before.
Capitalising on local demand
According to a report by the National Retail Federation in India, 9 out of 10 consumers have changed their traditional shopping habits in the past year, and more than 50 per cent of them have ordered products online that they would have normally purchased at a store. Further, a study by Facebook and Boston Consulting Group revealed that India displayed the highest surge in preference for e-commerce, among other top nations including China, Brazil, Indonesia, Thailand and the Philippines. By digitizing their businesses and equipping themselves to sell online, SMBs are no longer confined to their local markets.
In fact, supported by the call to go Vocal for Local, SMBs trading in categories such as FMCG goods, consumer durables, toys, electronic appliances and goods, kitchen articles and accessories, home furnishing, handloom and even handicraft have been able to make the most of the consumer demand in the nation. Further, through a host of initiatives undertaken by established industry players, a wide range of authentic crafts from Indian artisans are finding their way into ecommerce platforms. Not only is it giving prominence to India’s rich heritage by enabling weavers and artisans, it also helping them showcase ‘Made in India’ products to customers.
Rapid adoption of digital payments
As consumers sought to minimise physical touchpoints and interact with businesses online, this scenario spurred the adoption of digital payments like never before. As SMBs evolved to keep up with this behaviour, hassle-free online transactions led by UPI became a go-to option for sellers, especially in smaller cities and towns. To put it into perspective, 1.12 billion transactions worth over INR 2.06 trillion[i] were processed in just the first half of November 2020. Being saved from the hassle of long bank queues and managing bundles of currency notes, further made this a preferred option for sellers. Adopting digital payments has also allowed them to manage their working capital easily, enjoy liquidity and ensure business continuity.
Embracing digital literacy
In order to balance offline-online models, SMBs have been compelled to learn basic digital skills. Engagement with digital technologies like social commerce and ecommerce have become critical to have a greater market reach and provide revenue growth acceleration. As per a KPMG report, businesses that are digitally engaged grow twice as fast as offline businesses. In addition to this, ecommerce brands have helped equip SMBs with aspects like digital cataloguing, advertising, inventory management, customer communication, etc., to attract customers.
As the world recovers from the setback caused by the pandemic, SMBs now have the opportunity to collaborate with established players to contribute towards import substitution and boosting the nation’s exports. As they get back on the road to recovery and aid India’s journey to become self-sufficient, SMBs will have to use a combination of offline and online customer touchpoints to scale the business to newer heights.
Further, it is expected that increased internet connectivity in India’s non-metro cities, growing data consumption, as well as better infrastructure for shipping and logistics will propel India’s e-commerce market to around $85 billion by 2024. Given how well the 3 Cs – collaboration and compassion have helped the SMB sector drive commerce in India – one can expect this segment to capitalize on the plethora of opportunities lined up and outperform itself in the coming year.
