Why collaborative commerce is the need of the hour for Indian economy
Today, there’s a common perception that the pandemic has pushed the world into a dystopian era. After all, the new normal has disrupted normalcy of everyday life. A simple walk to the park, a trip to the grocery store, a tea time break with colleagues, a customary snack at the neighbourhood chaat shop, a weekend travel, things which were once taken for granted are now seen as a far-sighted luxury. The disruption has impacted customers and businesses alike, but the consequence has been far more dire for small businesses. These narratives are being told time and again so much that it is becoming hard to see if there’s light at the end of the tunnel.
But, on ground, unknown to many, the signs of despondency are slowly making way for resilience. There are positive narratives of the ecosystem coming together to slowly adapt to the new normal and find positivity amid the crisis. There are stories of courage and hope. And, the panel discussion on ‘galvanising mass entrepreneurship’ hosted by Global Alliance for Mass Entrepreneurship (GAME), as part of the day-long webinar brought to the fore some of these positive narratives.
Moderated by Madan Padaki, Co-founder, GAME, the panel saw Gunjan Krishna, Commissioner, Directorate of MSME, Government Of Karnataka; Vidit Aatrey, Founder & CEO, Meesho; Manisha Panwar, IAS, Principal Secretary to the Government of Uttarakhand;
Ankhi Das, Public Policy Director, India, South and Central Asia, Facebook; and Dhimant Parekh, Founder & CEO, BetterIndia, sharing insights and perspectives. The industry experts shared their perspective on the kind of support that small businesses will need to come back to life, why there’s a need for consumers to empathise and understand the need of small businesses and how the ecosystem can come together in support of them.”
Setting the stage for the panel discussion, Madan shared, “The economic hit in the country will affect small businesses the most. But, there is a lot of action happening on the ground. There is support coming in from various quarters. And, if we need entrepreneurs to take courage, we need to amplify these stories further and also get the ecosystem to further collaborate and channelise support for mass entrepreneurs.”
The panel saw the industry experts sharing how they are coming together in aid of micro entrepreneurs and the roadmap to further galvanise mass entrepreneurship.
The role of an enabler
As a startup that works closely with millions of micro entrepreneurs, Vidit noted that some of the enterprising entrepreneurs have already realised the magnitude of the new reality and have pivoted their businesses to stay relevant.
“We are seeing a lot of manufacturers shift from producing apparel to manufacturing masks and other essentials that they have never sold before. While they have taken the first step to factor in the market demand, they don’t know what’s the right pricing or how to market it because it isn’t their conventional category. And this is where we are coming in to help.”
He added, “As an ecosystem player, it becomes important to act as an enabler to these microentrepreneurs by giving them access to infrastructure, providing liquidity or even insights and data intelligence to gravitate towards certain new categories that are in demand, so they can continue some business.”
Vidit also noted that the transition to venturing into new categories has not just been the case with those involved in manufacturing but also those in the services industry. He shared that women who aren’t now able to run boutiques are upskilling themselves and selling online education packages. In short, mass entrepreneurs are making an effort to tap into the market demands.
“If we can help these mass entrepreneurs now, a lot of them will survive the whole period and may even get new opportunities that will help them in the long term.”
Why the focus is now on economic recovery
Today, after the initial focus on health awareness and bringing some maturing there, the focus, especially for enterprises and governments is now on bringing some amount of stability in the economy.
“The concurrent effect of the pandemic has also been what appears to be tailing on economic devastation and the realisation that digital technologies can help to build resilience,” shared Ankhi.
She said that seeing a strong desire to knowledge acquisition among micro and small enterprises in rural India, Facebook was instrumental in hosting a series of webinars. “We saw more than 20,000 small and medium enterprises from rural communities registering for these webinars, which showed that they are underserved even when the desire is real and huge.” She added Facebook will continue to work on the capacity-building side, to make knowledge commerce available in local languages and partner with the state and central government for widespread dissemination.
“The second thing which we are doing is opening the access to capital to address the liquidity crunch among microentrepreneurs. Facebook recently announced a $100 million grant which is being distributed globally. In India, we are currently studying and assessing what the deployment should look like.”
Agreeing to Ankhi’s perspective and taking the conversation further, Manisha, said that the government is now working towards getting the economy back on track. “But, the need of the hour is to push cash into the market. We are talking to state-level bankers and working on a plan. But, because the government too is cash-trapped, the front loading will have to come from the financial institutions.”
She added that the other areas that the government has received requests include tax exceptions, GST exemptions, waivers and incentives.
“We are working on a medium and long term strategy for the state government. While I wouldn’t say, we are tying all of them together, a lot of interaction is happening on that front.”
Sharing an interesting perspective on resilience, Manisha said, “As a state that is disaster-prone, we have seen the rural communities to be more resilient. And, even in the current situation, we have seen how rural self-help groups have quickly mobilised themselves to make masks and other essentials. Because, they know it will be in demand for a long time now.”
Joining the conversation on economic recovery, Gunjan shared that in addition to the credit guarantee scheme announced by the Prime Minister, the Government of Karnataka is keen looking at what they can do differently as a state, especially to ensure liquidity through institutional mechanisms.
“And, here at a micro level, we realised that if we could address the trust issues that come with a traditional chit fund model, we will be able to flush some money at the bottom line. So we are looking at leveraging blockchain technology to create a mechanism to ensure peer to peer lending. Because, the government cannot be omni-present.”
She added, “The current crisis has shown us that people who could innovate were the ones who could use technology. With the world changing forever, MSMEs can no longer ignore technology any longer.”
The role of empathy and understanding in business
Dhimant, in his passionate talk, shared why it is important to make a choice and consciously buy from small businesses. “To do that we need to understand the value that we as customers add to these small businesses and understand the impact that we are making. We need to start making informed choices, because even today the purchases are largely transactional.”
He opined that empathy will go on to play a far more important role than just capital alone if small businesses have to pull through the tough situation. “More than just the product or the service, we need to look at the entrepreneur’s story. And, here storytelling and media platforms can help to build those stories and create impact.”
Anki conceded with Dhimant and said “We need to tap into our humane nature to understand what civic responsibilities are at this hour. And, it does not matter which economic or social classification you belong to.”
She added that this inspection should happen at an industry level to revisit CSR budgeting.
“A lot of the funding and support so far focused on health and education, because these are acute challenges. But, somewhere the support to the entrepreneurship ecosystem has been missing out. We need to see what microentrepreneurs need in terms of access to capital and also the mentorship support.”
Building synergy and act
The speakers also explained how making mentoring a mass movement in itself could help the ecosystem of micro entrepreneurs survive and push boundaries and the need for a common hub to build skills and knowledge to reduce information asymmetry. The underlying theme that was reiterated time and again was that there is a need to build synergies with institutions, build capacity and democratise information in the last leg.
“It is time to work with each other rather than reinventing the wheel with the little time and resources that we now have at hand - was the key concluding message.