Vishal Verma’s ophthalmic instruments business, started by his family in the 70s, shut down due to poor sales. After graduating in 2005, Verma decided to get the business up and running. But the firm, being based in Ambala, found it difficult to get orders and build a clientele outside Punjab and Haryana.
This is not only true for Mr. Verma’s family business but MSMEs across India. Medium, small, and micro enterprises’ exports contribute at least 40% towards India’s GDP (gross domestic product), according to the Ministry of Micro, Small and Medium Enterprises, in October 2020.
Due to lockdown restrictions across the world, a major chunk of MSMEs were not able to trade domestically. Many could not have even imagined trading internationally. But tough times also bring opportunities and online marketplaces stepped up to support enterprises in getting international orders and increasing sales. Indian enterprises can register in these global marketplaces, get global insights to start listing and sell their products in countries including the UK, the US, Germany, and Australia.
Also, these global marketplaces have made recommendations to the government for lowering entry barriers for small businesses in the Foreign Trade Policy which could open up the global cross border ecommerce market.
Ophthalmic instrument firm owner Verma also stepped up his game during the lockdown. Currently, he has listed more than 500 products and exports instruments to customers in the UK, the US, and Australia, among other countries.
These are numerous such examples of cross-border B2C selling which have enabled entrepreneurs to build successful businesses which are future ready.The increase in exports through marketplaces has further accelerated during the pandemic.
Enabling Indian MSME’s and developing the ecosystem
Only a fraction of the 6.5 Cr MSME’s sell globally on the cross-border ecommerce platforms therefore hand holding them through this journey of digitization and embracing this opportunity needs all the ecosystem players to play their role. Jewelry which accounts for large volumes of what is sold from India on cross-border ecommerce marketplaces are largely concentrated in 3-4 clusters out of the 300 clusters that exist. Apart from the state government, the central government in the Union Budget 2021-22 has allotted INR 15,700 crores were allotted to the MSME sector to realise the Make in India — Sell to the world objective.
Competing in the global cross-border business, requires cross-border marketplaces to focus on following broad areas – Digitization, Automation & Integration, Customs & export infrastructure, Logistics & related processes. Marketplaces have been engaging with government stakeholders who have been actively seeking inputs to simplify processes for MSMEs to export from India. Simplifying of export documentation, customs clearance and remittance processes will enable India made products to gain a much larger share of ecommerce cross border pie.
Logistics costs and shipping options are a key determinant in competitiveness on ecommerce marketplaces. Certain categories such as Fine Jewelry for which India is renowned will benefit from the recent clarification from the government that enables the carriage of precious jewelry by private logistics providers. Apart from this low cost trackable shipping options and expansion of India Post’s international shipping services across the country will be major boost for Indian sellers. The foreign trade policy is a great opportunity to initiate critical reforms for the cross-border business to grow rapidly over the next few years.
Marketplaces too need to play an important role in handholding MSMEs, creating awareness and guiding them through the entire process – from listing products to last mile delivery. E-commerce marketplaces have support teams, who respond to merchants’ queries in real-time and provide guidance with tools to enable their business, quick online store set up along with a plethora of plug-and-play tools for better marketing. All of this will help MSMEs and direct-to-consumer brands to scale at a much faster rate as compared to offline markets.
2021 will be the year of transformation with growth in cross-border of 36% in 2020. Consumer behaviour has changed now and forever. Considering this as the new normal, Indian MSMEs can start to look forward to shaping their futures building sustainable business on cross-border marketplaces and selling across the globe.