Digital World Perfect Choice To Reshape MSME Sector, Amid COVID-19 Pandemic
The coronavirus impacted the cash cycles of MSMEs, who act as the backbone of India’s inclusive growth. However, the plight of the MSMEs sector is a matter of deep concern.
The second-largest sector of India-Micro, Small and Medium Enterprise (MSME) which is considered as a breeding ground for entrepreneurs and innovators, has witnessed a lot of ups and downs, in the last two years, due to the ongoing Coronavirus pandemic.
The coronavirus impacted the cash cycles of MSMEs, which act as the backbone of India‘s inclusive growth. However, the plight of the MSMEs sector is a matter of deep concern.
According to the estimated number, in India, there are approximately 63 million and employs 110 million individuals associated with MSMEs. The MSMEs in India produce over 6,000 products for global and local consumption.
Amid the pandemic, the MSME sector has seen several changes towards technology usage and adoption like communication, marketing, team collaboration, payments, hiring, procurement of goods and services and storage, registration of new business, etc.,
Sandip Chhettri, CEO of TradeIndia, an online B2B portal for small businesses, said, "There has been a significant increase in the way MSME are using digital platforms to Buy and Sell. This is evident in the TradeIndia platform as well. We have seen a 40.5 per cent increase in buying requirements posted during the pandemic."
As per Tradeindia survey with SMEs titled, =Barriers to Innovation in Indian MSMEs‘, a total of 83 per cent of people said they need access to finance and investment solutions and 63 per cent said they lack understanding of technology, knowledge and guidance. "Tradeindia is helping SMEs with their digital presence, adoption and helping them with access to new markets by connecting with Buyers of their products," Chhettri said.
Importance of empowering MSMEs post-pandemic world: Digital platforms can empower SMEs to cut operational expenditures, automate business processes and considerably reduce the scope for errors.
Chhettri said, "Digital tools combined with an innovative strategy will also help SMEs become more competitive and better understand consumer behaviours. SMEs need to redesign their business operations and zero in on mobility, data analytics, cloud and integrate these technologies across their processes."
A credible, experienced technology partner in this regard can play a pivotal role in enabling an SME to deliver exceptional value to customers and thrive amid any crisis. While SME heads have been sceptical about investing in digital solutions and strategies, the advent of the COVID-19 crisis has made it compelling for businesses owners to consider digital technologies to survive and evolve, he mentioned.
A sustainable and effective MSME: Prime Minister Modi-led Centre government has expressed on several platforms how the success of the MSME sector is important to achieve the goal of an economic superpower. However, the COVID-19 crisis has impacted it with challenges like stress on cash flow, new safety norms, government regulations, increase in online business models, restriction on travel and movement, and a slowdown in the local and the global economy, etc.
"As most MSMEs are small and fragmented, they do not enjoy the benefits that scale offers in areas such as marketing, sales operations, and new product development. While Indian MSMEs as a whole are highly varied in the type of products produced or nature of service
rendered, at certain geographical locations, there are concentrations of common skill sets or types of industries. These can be clubbed into clusters with common characters," he said.
After the Coronavirus pandemic hit India, almost every business registered an online presence to widen the discoverability of a business by potential customers. He said, "MSMEs can use digital marketing techniques like media promotions, social media marketing, content marketing, online client testimonials etc., which is a significant advancement to word-of-mouth marketing in the digital marketing era."
Technology solutions for systemic challenges in MSMEs: Digitalisation can enable SMEs in responding to challenges and innovate to grow, supporting wider economic recovery.
"Digitalisation which helps businesses in some areas essential to their development, namely by helping them to optimise finances, improve productivity, expand to new markets and customers, and use the information to foster innovation. Collectively, this supports the potential for the overall growth of the economy, given the importance of SMEs to the wider economic picture. By adopting digital products – be it customer relationship management (CRM), selling on e-commerce platforms, or online payments – small players can ramp up productivity levels, add agility and even enter new markets," chhettri said.
Digitalisation can also help SMEs respond to the challenges posed by the pandemic economy by becoming more efficient, flexible, productive, and innovative, with greater resilience and the ability to take advantage of potential business opportunities in the economic recovery. In fact, digitalised SMEs have identified new business opportunities in the pandemic economy at more than double the rate of the least digitised SMEs, he added.