Technology-led marketplace platforms can help small businesses grow, even under seemingly adverse economic conditions
Business activity at small businesses, such as kirana stores, restaurants, pharmacies and electronic goods retailers, have been a barometer of India’s domestic-consumption-led economy. In the wake of the COVID-19 pandemic, traditional businesses have been affected the most – from wholesale markets to customer traffic – as most usually operated in and catered to a local area.
In fact, for an MSME to expand its operations, it is imperative to expand its ecosystem of buyers, sellers and suppliers with whom it does business, and eliminate inefficiencies in procurement and impediments in accessing customers.
For example, a restaurateur usually spends time, effort, and resources in procuring fresh vegetables and other ingredients from the local market for his menu. If he were to get the vegetables and other ingredients at his doorstep, at competitive prices, much like in B2C ecommerce, it will free his time and resources to focus on his core business.
A simple and intuitive technology-led, mobile-first commerce and financial services solutions for MSMEs can help bring efficiencies in and solve problems related to supply chains, acquiring new customers who might not be in the immediate vicinity, as well as bring alternative credit sourcing.
Such a platform would be beneficial equally to producers and customers, in manufacturing and services sectors alike.
Innovations in digitalisation have democratised availability of technology: digital technologies are customisable and available on-demand for micro and small businesses just as for large multi-national businesses.
The number of smartphone users in India were nearly 700 million in 2020, and with internet access in the country among the cheapest in the world, the average kirana store and MSME owner has easy access to digital technology and services.
Entrepreneurs and small businesses are increasingly realising that by getting onboard digital B2B ecommerce platforms, they are able to showcase their products to a wider audience and reach more customers.
Such platforms offer transparency and a wide choice of goods, competitive prices for both producers and customers, and a verified supply chain network that makes buying and selling of goods reliable and predictable. All this creates a free and equitable marketplace accessible to manufacturers, wholesalers/traders and retailers alike.
A crucial aspect for such platforms is that they need to be trusted ecosystems and enablers that help bring efficiency in offline supply chains by bringing them online. A good metric of a free and fair marketplace is the number of times a buyer repeats his purchases.
A high proportion of repeat purchases reflects the quality of sellers on the platform, as well as the quality and price of goods they offer on the marketplace, in addition to convenience of delivery and payments.
Providing easy access to these pooled platform resources through a ‘SaaS’ or Software-as-a-Service model will help micro and small businesses scale with speed, while incurring only nominal expenses in using digital technology. By helping them access bigger and newer markets, and easing their capital issues, digital B2B ecommerce platforms help ensure that any impediments to their growth are taken care of.
India has over 63 million MSMEs, whose growth can be driven further by leveraging technology and data. Because of the pandemic, there is increased receptivity to digital solutions, which can simplify growth for micro, small and medium businesses in India.
A digital marketplace helps in capacity building of MSMEs, from procurement and finance to critical business services aggregation, so that they can focus on their core business of manufacturing/distributing high product quality and upskill resources to scale their business.
Simplifying growth for entrepreneurs and MSMEs is one of the most pressing challenges that digitalisation can help with. This growth can directly contribute to the aim of sustained 10 percent plus growth in the Indian economy.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)