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MSMEs now prioritising cross border trade, online selling, social commerce: Report


As small and medium businesses in India learn to cope with changing market scenarios due to the ongoing pandemic, there has been a significant increase in their participation in online selling, social commerce and cross-border trade. As per a recent survey, 9 in 10 MSMEs say cross-border trade is a key area for business growth and 2 out of 3 MSMEs use social media as sales channel today.

The survey by PayPal India in partnership with Edelman Data and Intelligence, aims to understand how Indian MSMEs have adapted during the pandemic by adopting a digital-first approach while leveraging the global opportunity and their key priorities to scale up.

The MSME Digital Readiness Survey 2021 was conducted between October to November 2021. The respondent included small businesses and with 250 business decision markers of India’s SME with annual turnover ranging from Rs 5 crore to Rs 250 crore. The businesses show an average turnover of Rs 123 crore and an average employee size of 386 persons. The sample endorses a mix of industry, mainly comprising the services (36%), production (28%) and retail and hospitality (16%) sector.

The survey highlighted that after two years since Covid-19 hit the country, more than half of small businesses (52%) witnessed a positive impact on their business once economies began to reopen. In fact, 29% of the MSMEs found that the business environment in India became more favourable for online sales and for 31% the cross-border opportunity was promising.

“Initially it was quite tough, but they’ve been adjusting and they have taken actually kind of a leap here. Our insights clearly showed that majority of the MSMEs have benefited post pandemic, especially the guys who have actually taken the lead to go digital. Further, one in three businesses have benefited from various payment offering and cross border selling,” Nath Parameshwaran, Senior Director, Corporate Affairs, PayPal India said.

Since the pandemic and subsequent lockdowns brought a shift in consumer behavior, it paved the way for online buying. The survey showed that MSMEs saw a 65% increase in online buying from customers and close to 80% shared that their consumers are more receptive to using different payments options. The ease, accessibility and adoption of digital methods has led 51% of MSMEs to see an increase in spending from existing customers while 46% witnessed an increase in repeat purchases, the report said.

“We saw a completely new segment of consumers that have been coming online- what we call as the silver tech generation- people typically between 50 to 70 years, who may be coming online for the first time,” Parameshwaran said

MSMEs have also actively participated in leveraging technology and increasing their online presence. The survey highlighted that currently, 66% of MSMEs use social media as an online selling channel, followed by marketplace (62%), company-owned platforms i.e. app (61%), own e-commerce website (54%) and third-party ecommerce platforms (54%). 49% MSMEs surveyed were keen on expanding or developing their own website or app.



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