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MSMEs: The untapped powerhouse fuelling India’s ecommerce boom

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The narrative of India’s economic rise often focuses on statistics pertaining to a booming youth population, surging internet penetration, and ambitious GDP targets. These factors undeniably paint a picture of a nation on the upswing. A recent report, by Google, Bain & Company, and Temasek, adds another crucial detail to the canvas: India’s consumer internet economy is projected to reach a staggering $1 trillion by 2030.

While these paint a compelling picture, this meteoric growth rests not solely on macro trends, but on the collective efforts of millions of India’s Micro, Small and Medium Enterprises (MSMEs). These enterprises, the lifeblood of local communities, are often overlooked in traditional economic analyses.

MSMEs: The stars of the Viksit Bharat Ambition

The government of India’s vision of ‘Viksit Bharat’ (Developed India) hinges on a dynamic economic ecosystem. With their deep local roots, agility, and innovative spirit, MSMEs perfectly embody this vision. They contribute a staggering 40.83% to GDP and employ millions. Yet, their presence in the ecommerce revolution needs to be utilized further. This presents a significant opportunity waiting to be unlocked.

Why MSMEs are ecommerce gold

What makes MSMEs so well-suited for the ecommerce age? Here’s why they’re gold:

01. Adaptability champions: Unlike larger corporations, MSMEs can pivot quickly to embrace changing consumer trends and preferences. This allows them to capitalize on emerging opportunities and cater to niche markets, a hallmark of the new-age economy. Imagine a handloom weaver in Bengal spotting a rise in demand for sustainable clothing and instantly revamping their product line. This agility is a game-changer in the fast-paced world of ecommerce.

02. Local knowledge powerhouse: Deeply embedded in their communities, MSMEs understand local tastes and requirements better. This enables them to develop and curate product offerings that resonate with their target audience. For instance, a family-run spice shop in Kerala can leverage ecommerce to bring their unique spice blends to a national audience, personalizing the ecommerce experience.

03. Innovation incubators: MSMEs are often hubs of creativity and innovation. Unburdened by complex hierarchies, they can bring new and exciting products to market faster, constantly refreshing the ecommerce landscape. A small toy manufacturer in Channapatna might invent a unique, eco-friendly toy that becomes a national sensation through ecommerce platforms. This emphasis on disruptive innovation is a crucial driver of growth in the ecommerce space.

Bridging the digital divide for inclusive growth

Despite these advantages, challenges persist. Limited access to technology and infrastructure, particularly in Tier II and Tier III cities, hinders the full participation of MSMEs in the ecommerce ecosystem. This digital divide could potentially leave behind a significant portion of the promising driving force behind India’s ecommerce growth. Several trends are emerging to bridge this gap and empower MSMEs:

01. Government as enabler: Initiatives like Digital India and Skill India aim to equip MSMEs with the necessary digital skills and infrastructure. Tax breaks, subsidies, and simplified trade regulations are also being implemented to empower them further.

02. Ecommerce collaboration: Collaboration with ecommerce platforms offering bundled solutions like pre-configured software, affordable hardware, and marketing assistance can address upfront investment concerns and provide a one-stop shop for MSMEs. Flipkart, for instance, has programmes like ‘Flipkart Samarth’ that bring artisans, weavers, and micro-entrepreneurs into the ecommerce fold, providing them with incubation support, training, and reduced commissions. This collaborative approach is critical to empowering smaller players in the digital economy.

03. Knowledge is power: Mentorship programmes involving industry leaders and successful ecommerce entrepreneurs are providing valuable guidance to MSMEs. Additionally, online communities and curated resources are equipping them with the knowledge they need to navigate the ecommerce landscape.

Empowering MSMEs for global trade

The future of ecommerce is more than just domestic. The Directorate General of Foreign Trade (DGFT) is actively propelling ecommerce exports through its ‘Districts as Export Hubs’ initiative. This programme empowers MSMEs in identified districts to explore international markets via ecommerce channels. DGFT collaborates with ecommerce platforms and service providers to conduct capacity-building programmes and training sessions to make these MSMEs export-ready. Initiatives like BharatMart’s warehousing network further bolster India’s foreign trade aspirations. By providing warehousing facilities, BharatMart empowers rural MSMEs to bridge the knowledge gap and enter the international trade landscape.

Building a thriving digital Bharat driven by MSMEs

By addressing the challenges and harnessing the power of current trends, India can unlock the true potential of its MSMEs in the ecommerce sector. This will not only contribute to achieving the ambitious vision of a Viksit Bharat but also foster inclusive and sustainable economic growth. With increased emphasis on MSME growth, the near future could witness every MSME, from the local handloom weaver to the family-run spice shop, leveraging the power of ecommerce to showcase their unique offerings to a global audience. This is beyond a utopian vision; it’s the roadmap to a thriving Digital Bharat.

The coming years will witness a phenomenal rise of MSMEs in online retail. According to a Redseer analysis, we can expect them to surpass traditional e-tailing with a remarkable Compound Annual Growth Rate (CAGR) of 60-70% by 2027. This translates to a projected contribution of a staggering $50 billion to the e-tailing Gross Merchandise Value (GMV) by 2027.

As MSMEs leverage ecommerce to reach wider customer bases, they will benefit from similar online advantages as more prominent brands. This will necessitate ecommerce platforms to adapt their vendor policies to cater to the unique needs of MSMEs. Streamlining the GST Act and Rules to allow unregistered ecommerce sellers with specific turnovers to make intra-state supplies could significantly unlock the full potential of MSME contribution to ecommerce.

The power of collaboration: A win-win for all

The ecommerce revolution in India hinges on a collaborative approach. By working together, the government, ecommerce platforms, MSMEs, and logistics providers can create an ecosystem that fosters innovation, growth, and inclusivity. This will empower MSMEs to become the true stars of Digital Bharat, illuminating the landscape with their entrepreneurial spirit, local knowledge, and the ability to adapt and innovate constantly.

As MSMEs embrace ecommerce, they will empower themselves and contribute significantly to India’s journey towards becoming a global ecommerce leader. The future is bright for MSMEs in the Indian ecommerce space, and, with the proper support and infrastructure, they are poised to be the driving force behind a thriving Digital Bharat.


[Disclaimer: Thoughts and insights shared by Mr Rajneesh Kumar, Chief Corporate Affairs, Flipkart Group]





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Zomato Chief of Staff hiring: Social media users kickoff a memefest

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Food delivery and discovery unicorn Zomato is always making headlines for its quirky marketing posts and updates. But recently, its Co-founder and CEO, Deepinder Goyal started a storm on social media—not for his wedding, or appearance on The Great Indian Kapil Show—but for his mind-blogging hiring post. 

Goyal took to X to announce that he was hiring a Chief of Staff. He promised that the selected candidate would receive “10X more learnings than a two-year degree from a top management school” while working with him and “some of the smartest folks in consumer tech”. 

Pretty exciting right? But there’s a twist. 

First, there is no salary for the role of Chief of Staff. It doesn’t end there. The selected candidate will, in turn, have to pay Rs 20 lakh for this particular opportunity. Ironically, there’s another pre-requisite for this role, the candidate should have “zero entitlement.” 

The X post received a humongous response—9.1 million views (as of Thursday, November 21, 2 PM). Today, Goyal announced that he already received 10,000 applications for the post.

Unacademy’s chief Gaurav Munjal wrote this was a “no-brainer for someone who is super hungry and wants to make a dent.” 

While many termed this as a ‘once-in-a-lifetime’ opportunity, and better than a management course, Goyal faced a lot of flak for the eye-popping pre-requisite, commenting that this was more of a funding round in disguise. But again, as Barum once said, there is no such thing as bad publicity! 

YourStory scrolled through social media websites collating the best and the worst responses to Goyal’s hiring post:

An X user Keshav tweeted that he was formerly the Chief of Staff who got fired and advised the potential candidates to never order from Swiggy with Goyal sitting in the front of their desk.

Frido’s founder, Ganesh Sonawane, took to LinkedIn to announce that if a candidate gets hired for the Chief of Staff position at the Pune-based startup, the company will pay them Rs 21 lakh in the first year. 

Here’s what other social media users had to share:

Did you find something funny? Let us know!





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Ricky Kej, Shobu Yarlagadda, and Biren Ghose on AI and tech integration in music and film industries

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Technology shapes creative art forms such as music, film, and animation, notes Indian-American musical composer and environmentalist Ricky Kej, and Shobu Yarlagadda CEO, Arka Media Works.

Music and the way it has been created several changes and it has always depended on how people listen to music. From cassettes and CDs to streaming services such as Spotify and YouTube, the modes of consumption of music have also evolved over the ages, explained Kej.

The panelists Kej and Yarlagadda were speaking at the Bengaluru Tech Summit 2024 on Wednesday in a session ‘Lights, Camera & AI’, which discussed the integration of technology and Artificial Intelligence in the music and film industries. The session was moderated by Biren Ghose, a film producer and Managing Director, Asia Pacific, Technicolor Group.

Kej has won three Grammy Awards and has been nominated for a fourth for his album Break of Dawn at the 67th Annual Grammy Awards. Yarlagadda, a film producer along with Prasad Devineni founded Arka Media Works, a film production company known for its works in Telugu cinema industry.

While on cassettes, the listener would listen to all songs as recorded on it, the latest technology has enabled users to choose what they like to listen to. “Tech is great, it has democratised listening, but the negative is that there are related tracks on the sides so if the first five seconds are not captivating, the listener moves to another song,” Kej added.

As a result, composers create songs that try to grab the attention of listeners in this short span of time. Kej cited the recent song Tauba Tauba as an example of songs with catchy melodies that stay in the minds of the audience. Another trend, he noted, is that no song lasts more than 3-4 months— it trends for some time and another trend then takes over.

Similarly, the film industry has also seen a rapid evolution from heavy cameras to iPhone-shot movies. A common denominator in the two cases is tech adaptation and increased accessibility leading to democratisation of both creations as well as dissemination and consumption.

Before the arrival of modern tools, films were printed and shipped across India and the world in metal trunks and the journey took weeks. However, today, it takes only a click of a button for films to be transferred, which has helped in mass release of content.

“The consumption of content itself has evolved. While earlier it was just the theatres, it has moved to television and mobiles. From appointed viewing to anytime anywhere viewing, and the long-form content has become short-byte content to keep the audience constantly engaged is challenging. We do not have the luxury of time and the 2.5 hours of the film must keep them engaged, else they will quickly move to their mobile phones,” said Yarlagadda, who was a part of the Bahubali film production.

Karnataka is pouring resources into animation and visual effects. According to Ghose, the state has an active centre for excellence for animation visual effects, which is around 6-7 years old. And, the government plans to extend this initiative to four other cities in the state.

“There is a ground swell of talent that is coming from nooks and corners of states of the country and it will make it a great space to be in,” said Ghose. Technicolor Group provides visual effects, motion graphics, and animation services for the entertainment, media, and advertising industries.

“All of us in the industry are dancing at the crossroads of where creativity and technology meet,” he added.

Will AI make humans redundant?

While technology feels overwhelming at times, the differentiating factor will be human creativity and imagination, believes Yarlagadda.

Tracing the journey of technological integration in music, Kej explains that the early 2000s saw the introduction of Virtual Studio Technology Instrument, a plugin that allows for music creation on computers without the need for instrumentalists. “Violins, guitars and orchestra were all available on computers and were so authentic that it was impossible to discern the difference between real violins,” he said.

At the time, the technology sparked debate about whether musicians were needed in studios anymore. “Musicians who thrived brought creativity and improvisations to the table and took it to the next level,” Kej remarked.

Generic music for a horror movie can be AI-generated, but someone like Christopher Nolan in Oppenheimer would try and bring something new, amazing and unique and would require a human composer which will take the genre of music forward, said Kej.

Copyright issues and legal considerations go hand in hand with the integration of AI and technology in any field. This would imply that companies can not use animations of others to train their models but can use their own past ones to help with it, remarked the panellists.

Bengaluru tech summit

Technology also helps in collaborations with people from across the world. For example, Mufasa the Lion King, which recently had its trailer released, has seen a substantial number of Bengaluru talent in its making, said Ghose.





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Moglix acquires eco-friendly paper products manufacturer Khatema Fibres

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B2B commerce company Moglix on Thursday said it acquired Khatema Fibres, a manufacturer of eco-friendly paper products.

Leveraging Khatema’s manufacturing expertise, Moglix plans to integrate and diversify its offerings, reducing lead times and ensuring efficient delivery, the company said in a statement.

With expansion plans in Uttarakhand, Moglix aims to support the state’s industrial growth by creating jobs, promoting skill development, and enhancing local manufacturing capabilities, it said.

“This acquisition not only expands our manufacturing footprint but enables us to deliver even greater value as we meet the dynamic demands of the market. Our commitment to supporting India’s vision of a Viksit Bharat by 2047 remains steadfast,” Rahul Garg, Founder and CEO, Moglix.

This acquisition will help Moglix to improve local infrastructure and open new market opportunities for farmers and artisans.

Founded in 1990, sustainable paper manufacturer Khatema Fibres, with an annual capacity of 50,000 metric tonnes, offers a diverse range of eco-friendly products, including speciality high-strength kraft paper, interleaving paper, machine-glazed and machine-finished papers, various tissue options, sublimation paper, virgin test liners, and food-grade packaging solution.

The acquisition complements Moglix’s recent launch of Next Day Delivery in over 12 cities, soon expanding to 40, the company added.





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