Ease of doing business for MSMEs: Prof. Manoj Pant, Vice-Chancellor of IIFT at the report launch on November 14 said MSMEs have not benefited greatly because the majority of them don’t have access to digitization.
Ease of doing business for MSMEs: The Indian Institute of Foreign Trade (IIFT) in a research — funded by Flipkart Internet Private Limited — on India’s e-commerce sector and MSMEs in the online and offline retail market has said the e-commerce sector cannot be blamed for the slow growth of the Indian retail MSME sector as pointed out by the country’s traders’ associations. The statement was made after an indicative analysis of complaints raised by the Indian MSME retailers and traders’ associations and comparing them with the issues raised in the country’s comparator economies internationally.
IIFT said the report ‘E-Commerce Majors, SSI retailers, and the Indian Economy – Theory and Empirics’ also conducted a series of empirical tests by using a database of 49,847 firms, spanning both retail and manufacturing sector firms. This included analyses of the trends in the growth rate of the retail sector to the overall sector, the online/e-commerce sector, the offline retail sector, and lastly of the online and offline retail MSMEs in particular, for various performance indicators such as sales, exports, gross fixed assets, and the number of firms.
“The results indicated that retail as a sector did not suffer from any negative impact due to the emergence of the e-commerce major. It also has a positive impact on the exchequer in terms of tax revenues owing to the growth of the organized sector. The same was also seen for offline retail firms. Further, the graphical analysis showed that while offline retail MSMEs did not fare too well in recent years, the same has not been true for online retail MSMEs,” the report said.
Prof. Manoj Pant, Vice-Chancellor of IIFT at the report launch on November 14 said MSMEs have not benefited greatly because the majority of them don’t have access to digitization. He further mentioned that e-commerce firms have assisted MSMEs in accessing a large marketplace without incurring huge costs.
According to the report, specific issues raised by MSMEs against e-commerce majors in India included preferential seller treatment, deep discounting, and misleading advertising or fake reviews.
Importantly, associations such as the Confederation of All India Traders (CAIT), which represents around 8 crore traders in India, and All India Online Vendors Association (AIOVA) have been alleging e-commerce companies such as Amazon, Flipkart, and others of unethical business practices including the above issues.
The report also highlighted some “general complaints” raised by MSMEs “due to their relatively smaller size. The problems pertaining to the divide caused between large firms and MSMEs are not a new area of study.”