In an increasingly globalized world, foreign trade is an important contributor to economic growth. However as per Hans Timmer, World Bank Chief Economist for the South Asia Region India's economic growth in recent years has been "too much" driven by domestic demand and its exports were about one third of its potential.
The government has recognized the need to increase exports. According to Shri Piyush Goyal Minister of Commerce and Industry, their department has assessed a $50 billion opportunity for exports from the geopolitical situation around the world. Businesses around the world are looking at India as one of the alternate sourcing destination.
The need of the hour for Indian export growth
While India might be on the list of alternate destinations, the competition from other countries has been very tough. As more businesses globally look for new partners to source from, the need of the hour is for Indian exporters to actively reach out to them.
Outreach to new customers is an area where India can do much better. This is because India’s main exports like gems and jewellery, engineering products, textiles and clothing are primarily driven by MSMEs. The current export promotion channels of MSMEs are not geared for an aggressive outreach campaign.
Current export promotion channels are highly inadequate
Indian MSMEs currently depend on annual trade fairs or established connections via buying houses or sourcing agents to bring in new business. While trade fairs are important in reaching out to new customers, they are schedule constrained and offer limited scale for rapid expansion. Buying houses have limited reach given the customer profiles they are most likely to service.
In recent years importers are increasingly searching for new suppliers online. However the digital presence of a majority of Indian MSME exporters is either non-existent or highly sub optimal. Due to the high costs of listing on Global marketplaces, only the top few MSMEs list on these portals.
Most global Marketplaces are Chinese controlled
Most of the major global B2B marketplaces are either Chinese owned or controlled. Market places also have other inherent disadvantages irrespective of their origin. Given the ownership factors and the limitations, marketplaces might not be conducive to support an aggressive outreach by Indian exporters.
LinkedIn Promotion and Virtual Fairs can deliver India’s current export goals
LinkedIn can help integrate Indian MSMEs into Global Supply Chain by providing direct access to large number of sourcing professionals, small business buyers, buying houses, and other decision makers globally.
Unlike marketplaces, LinkedIn offers the opportunity to actively target buyer categories that MSMEs deem the best fit to their production capacity. Indian MSMEs can make important business connections with the people who matter, rather than wasting time with enquiries that do not convert.
LinkedIn is relatively unused for its export boosting potential and could offer Indian exporters the right tools they need to rapidly capture the current export opportunities. By making the right connections, a LinkedIn presence could be used as a continuous client engagement platform.
To guide MSMEs in effectively use the LinkedIn platform for export growth, SME MaXX has launched a Digital Export Promotion (DEXPO) offering . It allows MSMEs to share their business pitch and catalogues with potential customers from across the world. MSME owners can make new connections digitally with people that matter to their business. DEXPO can be accessed at https://www.smemaxx.com/digitalexports
Virtual fairs are a recent concept that are being used by commerce departments in many countries to virtually promote the products and services of their exporters. This model provides a group of MSME entities with an opportunity to promote their products/services to potential partners in a foreign market live via a webinar platform.
The webinars are either administered on demand at client offices or short social screening sessions are arranged for a group of sourcing professionals. Usually the webinars focus on a particular product category to attract relevant customer interest.
Virtual fairs offer MSMEs a much better pitch potential, direct connections to buyers and the possibility to understand buyer preferences in real time. They could be rapidly scaled up to include multiple locations across different countries.
While the Indian government had launched a number of programs to boost exports, an investment in to aggressive branding of Indian MSME exporters through virtual fairs could unlock far greater value in terms of new export orders and capturing the current geo political opportunity.
As per Shri Nitin Gadkari, the Hon. Minister managing the micro small and medium enterprises, the exports’ contribution from MSMEs will be increased to 75%. “We have to think big. It is time for India to make some landmark in the history of MSMEs,” he said. Adopting newer and more effective ways of export promotion for MSMEs will go a long way in achieving these objectives.
Anand Bidarkar, Chief Operating Officer
Puneet Dhiliwal, Investment Banking Analyst