Barriers of E Commerce in Indian Industry for MSME Segment Survey done by Shakir Ali MD of eMerchant
8 February 2013
Hyderabad : eMerchant Digital. Hyderabad-based leading player in the Mr. Sahkir Ali CEO of e Merchant Digital 300x199 Barriers of E Commerce in Indian Industry for MSME Segmentdigital media marketing sphere in India, USA, UK, South Asia, UAE and Australia completes five years announces opening up of eMerchant Digital Academy. The Academy will impart training to Working and non professionals in Digital Marketing. These programs include 1. Workshop, 2. Tweleve Week Certificate Programs and Four Weeks, Weekly twice Certificate Program for working professionals informed Mr. Shakir Ali, Managing Director of eMerchant Digital addressing a press conference in their news office premises at AC Guards in city. Our free public seminars “Go Online” series are hugely successful. Recently organized Seminar at FAPCCI was attended by over 180 participants. Few thousand people benefitted from these programs organized at various industry platforms in the recent past informed Mr. Sakir Ali. The eMerchant’s thrust areas include web designing, development, SEO & SEM, ecommerce solutions, branding, and reputation management to many big, medium and small enterprises. In a relatively short span of time, it has been able to consolidate its position as a trusted and respected service provider known for meeting deadlines and offering tailor-made specific solutions at competitive costs. We have developed websites of over 2000 clients worldwide and managing 150 websites every month, informed Mr. Shakir Ali, To celebrate the occasion of shifting to news office as well as its 5th anniversary, eMerchant Digital unveiled a Research Paper “Barrier of E Commerce in Indian Industry for MSME Segment” toiday. The research was carried out in city in December 2012 and Janury 2013. 50 MSMEs were interviewed for the report. The findings are really eye opening. E-Commerce turns out to be the buzz word of business in Indian scenario. Recent trends in the e-commerce based business outcome clearly emulsify the conservative market approach and open the alternative channels of communication. Despite all this, the rate of e-commerce penetration at the industry levels are not at par with the consumer adaptation levels. Medium and Small Scale Enterprises being the pillar of Indian industries, the penetration of e-commerce in to MSME segment drawn our attention. Our research paper focused on the penetration of e-commerce medium in MSME segment, what are the principal and secondary levels factors which are becoming barriers for the e-commerce medium for varied Indian Industries. The research methodology what we have opted is on qualitative data analysis and whereever available some secondary data quantification also was taken in to consideration for the correlation of our analysis. The outcome of this study could throw some light on the barriers which are causing hurdles for the impact of ecommerce on Indian MSME segment. During the research it was found that when the Indian consumer market has given acceptance to the kind of online medium of transactions, the trunk of Indian business MSME’s not responding equally fast to the changing environment is a noticeable constraint. Entrepreneurs and small businesses in India face many hindrances in not only the initial stages of setting up but also in growing their businesses. Arranging adequate finance is also an obstacle and this could also mean that the rate of technology adoptation is affected. All these hinder the prospects of startups and SMEs. We are delighted to see that the Indian government recognises the value of, and supports the increased usage of e-commerce to aid in the growth and development of local businesses said Shakir Ali.. “The growing Internet base in the country, with more than 121 million Internet users is highly encouraging. This trend has a direct correlation in the growth of e-commerce in the country. India’s Internet economy has been growing at 23% Y-O-Y as per the recent report by BCG.As small businesses around the world are increasingly leveraging e-commerce, Indian SMEs too are diving into exploit opportunities available through the Internet.” Effectiveness of eCommerce in Indian Business Indian Business space is showering a considerable opportunity for eCommerce, despite the fact that it is still in nascent stage, we can’t deny the fact that even the lowest of projections indicate as stunning boom for ecommerce. The way Indian consumer market is getting bombarded with communication gadgets like Computers, Laptops, Tablets and Smart phones; clearly indicate the kind of growth factors which is taking place in the Indian Industry. Today more of the Telco’s operating in Indian Spectrum are agreeing that their race and competition is about the Data and Content services rather than the Voice over services. This predominantly emphasizes the nature of impact and activity which eCommerce is spreading in the consumer segment. Even the rural parts of India started encountering ecommerce in their day-day lives, the way IRCTC subscriber base and the online ticketing systems; e-governance implementation in many districts has only popularized the ecommerce trends. Any amount of research can support us with the fact that the common middle class from rural segment might not understand the technical term as eCommerce, but they term it as “ONLINE”. “Online” is how the mid-age population of India is trying to educate themselves to changing trends of ecommerce oriented survival of life. India’s eCommerce industry is on the growth curve and experiencing a surge in growth. The Online Travel Industry is the biggest segment in eCommerce and is flourishing largely due to the Internet-savvy urban population, whereas the rural population is getting to adapt to that stage of ecommerce penetration. The other segments, apart from travel industry is about e-Tailing (online retail), online classifieds and Digital Downloads (still in a blossoming stage), online banking. The online travel industry has some private players such as Makemytrip, Cleartrip and Yatra as well as a strong government presence in terms of IRCTC, The online classifieds segment is broadly divided into three sectors; Jobs, Matrimonial and Real Estate and the B2B or B2C classifieds . Mobile Commerce is also growing rapidly and proving to be a stable and secure supplement to eCommerce due to the record growth in mobile user base in India, in recent years. Growth drivers and barriers are present in equal measures for new eCommerce ventures. Eventually all this has lead our country to be prospective on the ecommerce map. To make a successful e-commerce transaction both the payment and delivery services must be made efficient. The numbers which speaks about the ecommerce implementation is rising fast in the recent past. Majority of the Indian portals have also shifted towards e-commerce rather than relying only on the revenues generated from the advertisement segment. Many sites are now gearing up for a diverse range of products and services from flowers, greeting cards, and movie tickets to groceries, electronic gadgets, and computers to be in their site for visual merchandise. With stock exchanges coming online the time for dynamic e-commerce in India has finally arrived Emergence of eCommerce in Indian MSME Sector Barriers for eCommerce Implementation It is found that the are Barriers for eCommerce Implementation include: eCommerce Phobia, public perception issue about eCommernce, not foolproof legal system, eCommerce is a metro centric base, technological constraints, poor penetration of Banking services in rural, benefits under ICT Program from the Government of India are not known to many MSMes. Governments are ready provide certain bnenefits to MSMEs, but, they don’t know how they can utilize them. The end to end consulting and guidance on eCommerce Platform for MSMEs is not available. And the other very critical factor which the respondents from MSME’s revealed is that majority of them (95% of Respondents) has no clue on the government Initiatives towards the use of ICT in MSME and the way they can receive grants and subsidies for the same. Probably now some futuristic ecommerce companies, should work hand-in-glove mode with the authorities and the MSME industry bodies, and ensure that the appropriate capitalization of ecommerce trend can be set up in the MSME sector. Conclusions & Recommendations There is plethora of opportunities for the ecommerce implementation in the Indian MSME segment, whereas there is an extensive need for initiatives from the MSME bodies and the other counterparts, to ensure that adequate support is provided to the MSMEs. The other factor, which needs and effective role out is, to understand how the MSME’s can be assisted with the ICT initiatives of the Government, and support the companies with financial aid and subsidies, in order to encourage them for implementing ecommerce standards towards addressing global challenges. Any Industrial vertical of Indian MSME’s has typically the same kind of concern, about the need for technological expertise; hence forth focus is important on empowering the human resources of MSME sector, in way of organizing Skill Development programs. Also the research reveals a new dimension of thought process for further scope of research, as to whether Indian ecommerce market is a Push market or a Pull Market. For more information please visit or contact Tel: 23300827 or Mr. Shakir Ali +91 9849256286 And Mr. Jeevan 9550980199