In yet another example that reiterates the potency of e-commerce to drive small business growth, global digital marketplace eBay recently announced in its ‘India Small Online Business Trade Report’ that all homegrown MSMEs on its platform were exporters who reached customers in over 42 countries. In stark contrast, only 8.8 % of offline traditional small businesses are exporters, the report says.
E-commerce lowers entry barriers for MSMEs and creates a level-playing field for small enterprises across geographies. The pandemic has created export opportunities for MSMEs by pushing them to leverage online marketplaces, to not only survive the aftermath of COVID-19 but also change the growth trajectory of the business, the report explains.
Based on economic transaction data from 2019, the report reveals that 92 % of small businesses on eBay export to 10 or more markets, 93% have a customer base in four or more continents and as a collective, they made sales in 210 markets. For the purpose of the report, the data was restricted to small sellers who touched or crossed USD 10,000 in sales, called eBay enabled small businesses.
Bringing the vision of Make in India to life, domestically produced fine jewellery, loose gemstones, bedding, textiles, auto parts, Ayurvedic remedies and home decor topped the list of exports, and the most favoured export destinations were the U.S., U.K., Australia, Canada and Germany, the report said.
In an e-commerce trend that has been consistent for the past couple of years, small sellers from tier 1, tier 2 and even tier 3 cities are outnumbering and outperforming their peers from metros. New sellers from non-metros formed 32% of the total small businesses for the study period. The report defines ‘newcomers’ as those small businesses that had no online presence before 2015, but broke the USD 10,000 sales mark by 2019.
Interestingly, the report mentions how, despite infrastructure and other challenges, small sellers from tier Z or tier 3 cities raced ahead of their counterparts from other geographies to catapult their cross-border trade agenda, ‘revealing a robust entrepreneurial environment and willingness to exploit the eCommerce marketplace’. At 37%, the newcomer rate from tier 3 was higher than even tier 1 and two cities, the report says.
Coming to the state-wise breakup, the report mentions that all eBay enabled small businesses from Maharashtra, Tamil Nadu, Telangana, Gujarat and Karnataka (states that account for 70% of India’s export basket) are exporters. The same is the case with small businesses from Uttar Pradesh, Haryana, Rajasthan and Delhi who have a presence on the platform. With penetration in 66 international markets, Bihar was the leading state with eBay enabled businesses that had the most diverse export footprint, followed by Haryana (56) and Delhi (49).
Intensive Policymaking proved to be a critical enabler for small businesses to improve their competitiveness, the report alluded, pointing out how these enterprises achieved ‘export success’ in product categories that were targeted by policymakers to serve customers in key international markets. For instance, 67% of small businesses from Madhya Pradesh are involved in exporting bedding items to the U.S. and UK, as policymakers have focused on the product category as an export item.
In an interview with The Financial Express, Vidmay Naini, Country Manager – India & South East Asia, eBay said that MSMEs must adopt the right strategies to become successful sellers on e-commerce platforms. They have to get savvy with product listing - describing the product’s USP is critical. It is also important to focus on aspects like pricing, post-transaction experience, processing returns, moneyback and other such policies, he said. While eBay provides some support and assistance, MSMEs must also do their part to emerge as successful e-commerce exporters, he said.