These MSMEs accessed new markets to scale to new levels of growth
From the lac bangle makers of Rajasthan and shoemakers of Agra, to sporting goods manufacturers in Meerut and garment manufacturers in Tamil Nadu, India’s Micro, Small and Medium Enterprises (MSMEs) provide gainful employment to millions of citizens. A key pillar of the country’s economy, MSMEs are estimated to deliver over 45 percent of the country’s industrial output by value.
While the MSME clusters mentioned above have established a credible reputation for producing quality products, with high levels of productivity, the majority of the country’s MSMEs are yet to realise their true potential. One of the key factors hindering their growth is the lack of access to markets beyond their geographical location.
The output of MSMEs is often labour-intensive, and most operations are not backed by digital tools and connectivity. This often perpetuates a cycle that stagnates growth . As MSMEs tend to hire fewer workers, their output and productivity reaches a plateau. Owing to their inability to reach out to markets beyond their geographical boundaries, many are unable to see an increase in revenue that could be allocated to upgrade their processes, skill their workers and hire more workers to break the cycle and achieve growth.
The power of tapping into new markets
The drop in data prices and the availability of inexpensive smartphones will open up unprecedented access to the internet, and 760 million Indians are expected to be online in 2021. A presence on the Web will open up new markets for both sellers and consumers. The most prominent example is the meteoric rise of e-commerce in India, which is expected to be an $84 billion market in 2021, and set to grow to $200 million by 2027.
Social commerce is a relatively new phenomenon that has enabled millions of citizens to become entrepreneurs with minimal capital, right from their residences. Access to such markets has enabled many to go from having no earnings in the past to achieve a source of income. Such markets require minimal resources to access, but can open new growth opportunities for MSMEs.
Leveraging new markets to create new growth opportunities
Suraj Vazirani noticed that despite the presence of countless beauty brands in the market, there were still a few crucial and untapped segments in the women’s grooming industry. To secure this opportunity, he began The Beauty Co., in 2018 in Ahmedabad as a seller of women’s beauty products made from natural ingredients. His first marketplace was built on the popular e-commerce platforms in the country. After seeing initial success, he decided to scale up.
When he realised that many women still preferred the traditional way of buying established and trusted beauty products, rather than experiment with new varieties, The Beauty Co. ramped up their f social media game and targeted the audience with the right content by trying to figure out the needs and wants of today’s women, and attempted to fulfill them, gradually.
Soon after, the company launched a complete range of skin and hair care products, and started selling to popular e-commerce brands, who, in turn, sold directly to customers. In its first year, the business earned Rs 2.46 crore in revenue, and last year, it made over Rs 7 crore, claims Suraj.
Similarly, 25-year-old Pallav Bihani found that there was a need for affordable fitness products in India, right from health supplements and fitness accessories to immunity boosters. To fill this gap in the fitness segment, he founded Boldfit in Bengaluru in January 2019.
Today, Boldfit has 30 stock keeping units across multiple fitness categories. According to Pallav, accessing leading e-commerce markets digitally has helped Boldfit maintain a lean approach and reach customers across the country. He says that this growth would not have been possible without digital penetration and achieving their present scale would have been unthinkable a decade ago in the non-digital era.
According to the founder, Boldfit has fulfilled over 2 lakh orders so far, and today, one Boldfit product is delivered somewhere in India every minute.
In a span of two years, the company claims to be having an annual turnover of Rs 30 crore. While the challenges to growth and scale are many-fold, such stories show the power of accessing markets beyond one’s geographical boundaries to reach new frontiers of growth.