Data has consistently shown eCommerce for SMEs was a saving grace during the pandemic. The government needs to recognize this and take urgent steps that help small businesses embrace digitization and shift to online channels of selling.
- 1 Here are the 4 things the government should do to promote small DTC brands
- 2 1. Policies to sell online and offline with ease
- 3 2. Increasing global opportunities of eCommerce for SMEs
- 4 3. Providing digital training in eCommerce for SMEs
- 5 Developing eCommerce related infrastructure and logistics
- 6 Highlights Budget 2022: eCommerce for SMEs
Here are the 4 things the government should do to promote small DTC brands
1. Policies to sell online and offline with ease
The ET has reported that during the first lockdown in 2020, the MSME sector shrunk by 46%. The second lockdown resulted in businesses losses of 11%. The government hence needs to take adequate steps to prevent such losses in the future.
In the event of another lockdown, small DTC brands should have the option of switching to online channels of revenue when their offline sales have been affected.
A strategic and comprehensive framework to facilitate eCommerce for SMEs will help small DTC brands owners be more independent and in control of their business operations. It will also help them grow their business and profits.
There should also be uniform online and offline retail policies for these small brands. This will help online sellers benefit from government support and opportunities that earlier only offline retailers had access to.
2. Increasing global opportunities of eCommerce for SMEs
Small DTC brands today have very less opportunities to sell in markets outside India. The traditional process is also lengthy and complicated.
For example, a retailer has to go to associations, talk to trade bodies and has to send sample products to the foreign governing authorities before being able to sell their products.
eCommerce has simplified a lot of these processes. They can now enable international payments on their eCommerce websites and ship the products using the best shipping partners.
A strong online presence that shows regular online transactions can also help these small DTC brands build their reputation when approaching global authorities for export.
“eCommerce has made it simple for a lot of the players to take advantage of (global trade). Several MSMEs are exporting through the eCommerce route but their percentage is still quite low (Only 10-15%). So, there has to be a push for MSME eCommerce export in the upcoming foreign trade policy,” – Dr Avik Sarkar, Professor at Indian School of Business
The government needs to devise a comprehensive foreign trade policy to encourage eCommerce for SMEs. Reducing compliances and easing procedures will help small DTC brands get access to newer markets. It will also help Indian products get more exposure in the global economy.
Related read: How to build a successful global eCommerce business
3. Providing digital training in eCommerce for SMEs
There is a lot of potential in tier 2 and tier 3 cities for buying and selling online. But to make a seamless shift from offline to online stores, small DTC brand owners should know digital basics like:
- Foundations of eCommerce
- Operating an online store
- Inventory management
- Customer management
- Online payments
- Social media channels
- Choosing shipping partners online
- Managing the supply chain online
The government needs to accelerate training and capacity building measures in regions outside the metropolitan cities.
“It is increasingly evident that technology will be a crucial factor in defining the success and competitiveness of India’s MSMEs, both domestically and globally, in the coming days. Digitisation of millions of MSMEs should be a top priority”. – Nitin Gadkari, Minister for MSMEs.
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mojoVersity– A learning initiative by Instamojo, offers educational courses for free to equip you with important skills like understanding GST, legal and financial basics.
A healthy infrastructure and transport connectivity has allowed eCommerce to flourish in metropolitan cities. The government should now make developing similar networks in rural areas a priority.
Apart from railways, roads and shipping ports, the government should also prioritize building warehouses even in smaller districts.
eCommerce for SMEs can also contribute to higher employment in tier 2 cities by skilling people for last-mile delivery.
Highlights Budget 2022: eCommerce for SMEs
The Union Budget 2022 announced the launch of certain skilling platforms like the DESH Stack e-Portal that will help small DTC owners train, upgrade and improve their digital skills.
The government also declared fresh additions to a mega infrastructural project in the Union Budget 2022. The PM Gati Shakti Masterplan will now work towards improving inter-modal connectivity, especially in rural areas to ease the movement of goods and passengers.
Such provisions were needed to ensure more SMEs can have access to the benefits of selling online. Improved transport and infrastructure along with the relevant digital skilling will provide a nurturing ground for small DTC brands.
Related read: Here are all the Budget 2022 highlights for SMEs
With Instamojo, aspiring DTC brand owners can create a free online store, have full control over their own business operations, and also avail free services like inventory management and shipping.