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Thursday, 11 February 2016

Ecommerce is a booster for SMEs in Indian Economy

According to a report,'Impact of Ecommerce on SME', compiled by KPMG and Snapdeal, the SMEs have benefited a lot from development in ecommerce space. The marketing and distribution expenses incurred by the SMEs got reduced by 60% to 80%. This cost reduction paved a way to higher profit margins. Profit Margin surged by a whopping 49% making SMEs more profitable and successful.
The report highlighted the fact that SMEs require only Rs.3000 to enter the ecommerce arena. SMEs entrance into ecommerce space will take Indian Economy to a new high level. SMEs are now understanding the importance of ecommerce and are using it to give a kick start to their business. SMEs clocked a growth of 51% in revenue and growth of 7% in customer base with the help of ecommerce. Currently about 27% of online SMEs use the ecommerce platform. The most important reason of adoption of ecommerce by SMEs was to grow sales in a cost effective manner.
The contribution of SMEs in online sales is about 43% which is a significant number. Thus it is evident that more and more SMEs are using online resources to expand their business. Ecommerce enabled a direct contact between SME sellers and buyers thus reducing the supply chain and increasing customer support. 46% of SMEs agree that they get regular business deals with ecommerce marketplaces. However there are certain challenges faced by SMEs in adoption of ecommerce -
1. Improper information about expenses and costs involved - The common notion among SMEs on increasing online presence is that it is costly. This is totally wrong. Ecommerce helps in cost reduction and business expansion. The report explored that a SME require only Rs.3000 to maintain an online presence.
2. Lack of support and training - Some of the SMEs don't have the proper support and awareness on the usage of ecommerce platform to increase their business. Proper training must be provided to encourage them to go online.
The dream of Digital India can be accomplished only with the help of SMEs. When each and every business in the country will have a digital presence, the dream of Digital India will become a reality.