Many small and medium enterprises (SMEs) have taken to e-commerce platforms to expand their reach, both in the domestic and global markets.
According to industry sources, of 50 million SMEs in the country, at least three million, especially from smaller cities, are already using e-commerce platforms. And, in the next year, this figure is likely to double and should touch 30 million in five years.
Madanlal Suthar, based in Ahmedabad, had started Zeelplast Machinery with Rs 50,000 in 2008. The fully-automatic moulding machines manufacturing company was limited to supplying local areas, before it took to e-commerce. Now, it is getting orders from across India. Says Suthar, “The company has evolved from strength to strength with its brand identity, marketing support and business multiplying manifold.”
SMEs in manufacturing are also looking at tapping international business through this route. “The platform enables SMEs to understand the market in a better way. Moreover, it organises the unorganised sectors,” said Dinesh Agarwal, founder and chief executive officer of IndiaMART, a business to business networking platform.
According to a study, jointly conducted by domestic e-commerce player Snapdeal and market research firm KPMG, nearly 85 per cent of SMEs which adopted e-commerce believe it is a cost-effective medium for sales growth. In addition, the study also claims SMEs actively adopting the internet for business activity boast of 51 per cent higher revenue, resulting in 49 per cent more profit and a seven per cent broader consumer base than their offline counterparts.
“E-commerce platforms are giving a marketing channel to SMEs, bringing them new business from anywhere,” said Brijesh Agrawal, chief executive officer and founder of Tolexo.com, a business to consumer networking platform.
Some e-commerce entities are also helping SMEs to procure raw material at affordable costs. This has emerged as a new line of business. For example, Gurgaon-based Power2SME provides a platform to obtain pricing for SME procurement needs, door-step delivery and online tracking of orders. “E-commerce players are competing to provide personalised services, bringing in innovation and faster results for e-tailers,” said R Narayan, chief executive officer.
Ahmedabad-based tradohub.com is working in a similar way. It supports SMEs for buying raw material from international markets. Said Akash Domadiya, director: “Direct procurement of raw materials from global markets isn’t easy for individual SMEs and costs more. Buying materials through e-commerce platforms reduces the cost by six to eight per cent.”