New Delhi: The India Council for Research on International Economic Relations (ICRIER) Monday said that micro, small, and medium enterprises (MSMEs) integrated with e-commerce platforms report higher turnovers and profitability, than the non-integrated ones and that around 69% of the surveyed MSMEs used digital wallets and mobile payments as their most frequently used payment mode for doing business.In its annual survey on MSMES, it revealed that over 85% of surveyed enterprises reported an increase in total sales and profit margins after integrating with ecommerce channels, with most reporting growth of up to 30%. Around 14% of integrated firms reported hiring new employees, it said.
“It is important to highlight the fact that at present, the volume of sales made through e-commerce platforms account for a relatively smaller share of the firms’ total sales compared to those made through traditional routes. And therefore, there is significant scope for MSMEs to increase share of online
sales in total sales,” ICRIER said.
A majority of MSMEs surveyed cited the inability to access markets, retain customers, and effectively market their products are among the top challenges, according to the report.
The think tank surveyed 2,007 MSMEs between November 4, 2022, and January 20, 2023. MSMEs were selected across six product categories—sports goods (16.7%), toys (15.7%), processed and preserved food products (16.9%), apparel (17%), furniture (17.6%), and handicraft products (16.1%).
At the time of the survey, 1,005 enterprises were already integrated with e-commerce platforms, while the remaining 1,002 were not integrated.
MSMEs highlighted the importance of effective coordination between the central and state governments and the significance of having a comprehensive MSME policy that will allow such firms to find policy incentives and programmes in a single place.
Further, they noted that it was also essential for governments at all levels to create greater awareness about the various incentives and programmes for a higher uptake.
Apart from challenges pertaining to access to markets, surveyed MSMEs also indicated several other challenges relating to physical infrastructure bottlenecks, lack of access to credit and skilled labour and problems of delayed payments.
Besides collecting information on key performance indicators such as sales, employment and profitability, the survey also captured the characteristics of the businesses and their owners.
Firms with an export-oriented focus were more likely to integrate with ecommerce platforms, indicating a positive relationship between ecommerce orientation and adoption.
