E-commerce Linked MSMEs Have Greater Market Access: ICRIER survey

New Delhi, Sept 20 (KNN) Firms that are not integrated with e-commerce platforms are likely to find it more challenging to access markets at a time when firms already integrated with such platforms are making deeper inroads into markets by leveraging platforms, as per a recent survey on MSMEs.

The economic policy think tank Indian Council for Research on International Economic Relations (ICRIER) in its annual survey revealed that technology may represent a survival threat rather than an opportunity for MSMEs unable to join e-commerce platforms in the country, reported FE.

The survey, ‘Leveraging E-commerce for the Growth of MSMEs,’ was carried out between November 4, 2022, and January 20, 2023.

It included 2,007, of which 65 per cent were micro, 19 per cent were small, and the remaining 16 per cent were medium.

At the time of the survey, 1,005 enterprises were already integrated with e-commerce platforms, while the remaining 1,002 were not integrated.

As per the survey, policymakers and other stakeholders must be mindful of these potential inequities and seek to bridge the divide between the integrated and non-integrated firms, requiring an understanding of the factors that impede firms from joining platforms. 

The non-integrated firms in the survey indicated that the reason for not joining platforms was largely around lack of knowledge and information about digital technologies and e-commerce platforms.

In addition, the firm’s own internal capabilities which determine whether it stands to benefit from joining e-commerce platforms was also a challenge.  

“This suggests that bridging the gap between integrated and non-integrated firms will not only require investments in technology, digital skills, information, and other factors that are complementary to e-commerce adoption but also enhancing the capabilities and productivity of MSMEs by providing them with infrastructure services, financial services, managerial and business skills and enterprise support and training,” the survey said.

With e-commerce platform integration, over 85 per cent of surveyed MSMEs reported an increase in their total sales and profit margins. Among integrated firms, 60.4 per cent reported a turnover of more than Rs 5 million compared to 47.6 per cent in the case of non-integrated firms.

Significantly, among integrated firms, approximately 35.5 per cent reported a turnover between Rs 10 million and Rs 500 million.  

Among the non-integrated firms, the share of firms in the Rs 10-500 million turnover segment was considerably lower, at 15.6 per cent. Moreover, among the group of MSMEs that are engaged in exporting units, approximately 63 per cent reported being integrated with e-commerce platforms.   (KNN Bureau)