Know How MSMEs Are Dethroning Big Businesses in the E-Commerce Space?

The MSME sector, known as the powerhouse of India's economy, plays a pivotal role, contributing to approximately 40% of the country's overall exports and 6.22% of its GDP. Read to know how the govt is helping MSMEs grow.

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Sonu Vivek
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India's e-commerce industry is set to flourish, with the Micro, Small, and Medium Enterprises (MSME) sector emerging as a key contributor. 

Shiprocket X, a leading e-commerce enablement platform, conducted a survey titled "The State of Cross-Border Trade," revealing India's impressive global ranking at 9th place in cross-border growth. This achievement is attributed to various factors, including the post-pandemic surge in e-commerce adoption by retailers and active participation of consumers in global shopping. The Indian government's commitment to simplified cross-border trade has played a crucial role in fueling this growth.

India's total merchandise exports surpassed the $100 billion mark for the second consecutive quarter, reaching $105.8 billion during Q3 of the 2021-22 fiscal year. This milestone underscores the significance of e-commerce in driving the country's export revenue. 

MSME's contribution to India's GDP

Notably, the MSME sector, known as the powerhouse of India's economy, plays a pivotal role, contributing to approximately 40% of the country's overall exports and 6.22% of its GDP.

Shiprocket's Co-Founder, Akshay Ghulati, emphasized the immense potential of Indian MSMEs in driving cross-border trade. As India continues its trajectory to become the second-largest e-commerce industry globally, it has become increasingly accessible for small businesses to enter global markets. The survey conducted by Shiprocket aims to decode the challenges and expansion opportunities for Indian e-commerce brands, further empowering MSMEs.

Akshay Ghulati, Co-Founder, Strategy and Global Expansion, Shiprocket said, “Indian MSMEs are the powerhouse of the country with a significant contribution to our GDP. With the unstoppable growth of e-commerce in India, we are on track to become the second-largest e-commerce industry in the world, making it easier than ever for our small businesses to access global markets. We have witnessed firsthand, the tremendous potential of Indian MSMEs in driving cross-border trade, and hence, at the core of Shiprocket lies the passion to empower the merchants of BHARAT. This survey is a step forward in that direction and helps us decode the challenges and the expansion opportunities for Indian e-commerce brands”

One of the key drivers of India's e-commerce growth is the increasing acceptability of Indian products in the international retail market. Furthermore, the transformational changes in consumer buying behaviors have created a favorable environment for the MSME sector to thrive in the global e-commerce trade. 

The Federation of Indian Micro and Small & Medium Enterprises (FISME) predicts that the e-commerce export potential could range between $200 to $300 billion by 2030.

Reasons Behind MSMEs' E-Commerce Growth in India

From post-pandemic transformations to favorable government policies, there have been many key drivers that have enabled MSMEs to thrive and seize the opportunities presented by the digital realm. Let's take the look at some significant reasons behind MSMEs' E-commerce growth in India.

Post-Pandemic E-Commerce Adoption

The COVID-19 pandemic has accelerated the adoption of e-commerce by retailers, prompting many MSMEs to establish their online presence to cater to changing consumer behaviors and preferences.

Active Consumer Participation

Indian consumers have actively participated in global shopping, driving cross-border trade and creating opportunities for MSMEs to expand their reach and tap into international markets.

Simplified Cross-Border Trade

The Indian government's commitment to simplifying cross-border trade has facilitated MSMEs' entry into global markets, reducing barriers and enabling smoother international transactions.

Growing Export Revenue

India's e-commerce industry has played a significant role in driving the country's export revenue. MSMEs contribute approximately 40% of India's overall exports, highlighting their vital role in expanding the e-commerce sector.

Powerhouse of India's Economy

MSMEs are recognized as the powerhouse of India's economy, contributing around 6.22% to the country's GDP. Their significant presence and influence have positioned them to leverage the growth opportunities presented by the e-commerce industry.

Access to Global Markets

As India aims to become the second-largest e-commerce industry globally, MSMEs are increasingly able to access global markets and leverage their products' potential on an international scale.

Favorable Consumer Buying Behaviors

Transformational changes in consumer buying behaviors, such as increased preference for online shopping, have created a favorable environment for MSMEs to thrive in the global e-commerce trade.

Increasing Acceptability of Indian Products

Indian products are gaining acceptance in the international retail market, creating new avenues for MSMEs to showcase their offerings and expand their customer base.

Future Growth Potential

According to the Federation of Indian Micro and Small & Medium Enterprises (FISME), the e-commerce export potential for India is estimated to range between $200 to $300 billion by 2030, indicating significant growth prospects for MSMEs in the coming years.

The confluence of these factors has propelled MSMEs in India to grow and excel in the e-commerce space, making them key players in driving the country's e-commerce industry forward.

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