MSME and Ecommerce – Growing Together #ECommerceInnovation

As one of the rapidly developing nations, we cannot ignore the booming significance of MSMEs. I have already defined MSME and its role as the key contributors to employment and the GDP of the country, in my previous blog.  The fact that MSME is a huge stakeholder in the country’s economy cannot be refuted. However, despite its significance, this sector was among the worst affected during the pandemic and lockdown. That was mainly due to a continuing preference for traditional, largely cash and customer-credit-based transactions. The new normal has also revealed how most consumers prefer to shop online it is hassle-free and time-efficient. To overcome this bottleneck faced by the sector comes the role of E-commerce.

E-commerce or electronic commerce is a process of trading goods and services through digital devices and Internet networks. It is increasingly evident that e-commerce and technology is crucial factor in defining the success and competitiveness of India’s MSMEs in both national and international market. Ecommerce has become more of a necessity than a choice. Even the government has been introducing various initiatives such as Digital India, Make in India, Start-up India, Skill India and Innovation Fund to accelerate e-commerce in India. With notable e-commerce players like Amazon, Flipkart also entering the arena, the market is getting the much-needed thrust. Powered by private and government initiatives, the door for unprecedented access to customers across the globe has been opened for the MSMEs of India.

The advantages of e-commerce are far-reaching:

1. E-commerce enables SMEs to directly deal with manufacturers and suppliers and thereby, ensuring competitive pricing.

2. It also enables to scale up and reach the global market for more outreach.

3. With the e-commerce platform in hand, the marketing and distribution cost is reduced substantially.

4. All the factors as discussed above added with improved timeliness of marketing, global client base and flexible business conduct can aid MSMEs to increase revenues which is the final goal

Indian e-commerce is growing at a stellar rate and is the fastest growing online business industry in the world. This has been ably supported by government initiatives such as Digital India, Skill India, Startup India and Make in India. But apart from the government schemes, even the private players are contributing to the growth of online trade. To name a few :

1. SAMARTH’ by Flipkart – Walmart-owned Flipkart has launched this platform as a partnership of the e-commerce giant with five NGOs. It supports the livelihood of over six lakhs artisans, weavers and craftsmen by giving them access to a pan-India customer base of more than 200 million. It is practically a supplier development program that aims to empower 50000 MSMEs to ‘Make in India’ for local and global markets.

2. MSME Accelerate’ by Amazon
Amazon believes that a sustainable way for MSMEs to get on their feet is to go digital. Thus on the Amazon platform selection of deals, discounts and savings will be featured to help small businesses kick start operations as they cater to new demands. The event will feature a selection from both brands and MSMEs with over 3.7 lakh sellers on the marketplace.
Also, it is introducing Amazon ‘Digital Kendras’. These first of its kind physical centres will act as walk-in establishments and provide micro small and medium enterprises (MSMEs) the opportunity to learn about the benefits of e-commerce and avail a range of third-party services such as shipping and logistics support, cataloguing assistance, digital marketing services, GST and taxation support.

3. Collateral-free loans by Paytm – Financial services platform Paytm is extending collateral-free loans under Merchant Lending Programme in Paytm for Business app. The loan amount cap from Rs 2 lakh to up to Rs 5 lakh at a low-interest rate of 1-2 per to micro-merchants. This initiative will help the local stores & other small business owners who have been left behind by the traditional banking sector and do not have easy access to loans and credit.

4. ‘Atmanirbhar Section’ by Shopclues – ShopClues store takes forward the Indian Prime Minister’s ‘Vocal for Local’ message by exclusively offering domestic products that are ‘Made In India’ across categories including fashion, footwear, home & kitchen, jewellery & watches, groceries, electronics, beauty and appliances and many more. Local brands interested in being part of the project are being onboarded as a seller thus reopening the market for the MSME.

5. Merchant Stack by ICICI – In-line with the Bank’s principle of ‘Business with Care’, provides a bouquet of banking solutions and value-added services in ‘one single place for the retailer eco-system. This also includes POS transactions that offer instant overdrafts and settlement of the swipes. All they need to do is download the InstaBiz app.

6. The other initiatives – Apart from the one discussed above there are various other recent developments worth exploring such as

• The 9 day sales scheme by the Softbank – backed grocery seller Grofers.
• Spotlight North East’ programme (US$ 25 million) yet again by Amazon
• Walmart’s Vriddhi programme extended at Uttar Pradesh
• Collaboration between Bank of Maharashtra with Vayana Network, a supply chain financing (SCF).


With all the powerful players of the market, both Government and Private trying to aid the MSME sector are receiving the much needed positive thrust. The central government is also aiming to launch a big e-commerce site to facilitate MSME and Khadi Gramudyog. So we can all hope this collaboration of e-commerce and MSME will only result in a journey upward.

Note: Written as part of Blogchatter’s campaign #ECommerceInnovation. Read more posts in the campaign here

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