Let us look at the statistics very first. The MSME sector in India is very akin to the nation’s population, second only to China. As per a report by CII, in FY2020, the MSME sector accounted for a staggering 63 million units, with micro enterprises more concentrated across the rural regions of the nation, than in the urban components. MSMEs today contribute 6.11% of India’s manufacturing GDP, 24.63% of the services GDP and 33.4% of India’s aggregate manufacturing output.
The sector collectively employs more than 120 million persons and also contributes about 45% of the all round exports from India. Maintaining a steady development price of more than 10%, the segment is a shining instance, when it comes to advertising sustainable, inclusive improvement and creating massive-scale employment in rural regions, exactly where most of these are present. Therefore, provided the statistics, it wouldn’t be incorrect to state that the sector is absolutely nothing brief of being the incredibly backbone of India’s financial milieu, and has numerous a occasions acted as a veritable cushion against international adversities.
Having mentioned that, the COVID-19 pandemic has wreaked havoc on the country’s economy, deeply distressing all verticals and organizations alike. Plummeting customer sentiments, dipping demands, increasing unemployment and spend cuts at jobs have all additional aggravated the currently faltering business enterprise ecosystem. However, on the other hand, it has also accelerated the pace of digital transformation exponentially. Companies, across scope and sizes, in order to keep business enterprise continuity amidst these attempting occasions are relying heavily on digitisation – be it in the domain of entertainment, education, healthcare, fitness, leisure and the like. While India’s era of digital revolution has currently been underway, the COVID outbreak accelerated its pace in an unprecedented manner.
Owing to the growing well being and security issues in the wake of the virus outbreak, folks are moving on to on the web platforms, at a a great deal more quickly price than ever prior to. More and more people who earlier utilised on the web channels for particular sort of activities, such as apparel buying or meals ordering, are now employing mobile apps and the internet for a plethora of actions, such as ordering in household groceries or calling in property utility services, well being essentials, and so on, from the comfort and security of their properties. Social distancing, working from property norms have additional pushed this trend ahead and it is right here to remain, becoming what we get in touch with the ‘new normal!’
Given the present situations, it is challenging to fathom as to how any business enterprise, that refuses to ride the digital wave, can afford to remain afloat in the market place. A 21st century MSME can not rely solely on one kind of trade, i.e, – on the web or offline. It’s the amalgamation of the two that one requires to leverage, in order to scale up their business enterprise and revive their earnings in the post COVID globe. In truth, this distinction in between on the web versus offline is a mere distraction becoming peddled by vested couple of.
To place issues into the appropriate point of view, the world wide web and on the web retail is certainly a good leveller, taking into consideration India’s humongous smartphone and world wide web penetration. As per business estimates, the quantity of smartphone customers in India is slated to attain more than 760 million by 2021. Via the world wide web, any seller from anyplace, huge or smaller, can sell something, anyplace and to any individual, in India, sans geographical boundaries, employing the energy of on the web.
Online trading is also structurally organising the largely unorganised marketplace. Even the smallest merchant hailing from the remotest corner of the nation, deprived of heavy distribution instruments and advertising muscle, can take benefit of the world wide web and get very affordable access to a bigger audience base, with minimal investment and danger. In an unorganized retail market place like India, exactly where a great deal of the trade requires spot in smaller sized towns and cities, on the web channels of performing business enterprise is no more a matter of selection, rather an absolute indispensability. It resonates completely with a statement produced by the eCommerce Association of India. It states “One of the utmost important aspect which is being missed by almost everyone, is the possibility that eCommerce is probably the best way to organize the unorganized sectors in India”.
As we are all conscious, more than the final 5 years or so, the retail sector in India, especially, has been undergoing definitive transformation in terms of structure and scale. While fast urbanisation, financial progress and the resultant rise in acquiring energy and consumerism acted as essential catalysts for development, the COVID-19 outbreak has brought in a sort of disruption in the business. Swift digitisation of services and on the web platforms are in truth reached the point of no return now, hollowing out suburban buying malls and forcing organizations to be present vociferously on each on the web, as effectively as offline platforms.
From the regulatory standpoint, even although the government of India has announced a Rs 20-lakh crore economic stimulus beneath the ‘AatmaNirbhar Bharat Abhiyaan’ to help the nation to wade out from the Coronavirus crisis, by becoming self-reliant and self-adequate it failed to provide a great deal relief to the MSME sector. While the Aatmanirbhar Bharat policy needs our MSMEs to supply elements which are economically competitive and superior in high quality, till the time India’s manufacturing ecosystem does not gear up its high quality and pricing models, the correct vision of Aatmanirbhar Bharat as described by our Hon’ble PM can not be realized.
Banks are not capable to provide on the government schemes as numerous of the directives announced are not complete adequate. MSMEs who want to take loans have to physically travel to the bank branch and total a stockpile of paper-work amidst the pandemic. There are no streamlined on the web processes in spot. Also, banks can only disburse loans to these MSMEs who have an active Mudra account. It, nevertheless, does not cover other savings or present account holders. Additionally, these package does not consist of reduce revenue groups and hawkers. The price of interest charges carries a moratorium period for 12 months and they are not interest free of charge. The regulatory framework ought to be rationalized so that there is one uniform and normal regulation that covers the whole retail ecosystem, irrespective of the size of the business enterprise.
(By Dr. Samir Kapur. The author is a going to faculty to a variety of top management institutes, and teaches customer behavior and advertising management)