Role of e-commerce in MSME growth
Role of e-commerce in MSME growth

Role of e-commerce in MSME Growth

By bringing e-commerce, technical innovations have shifted the traditional technique of doing business into the digital arena. 

This technical breakthrough has resulted in a considerable increase in internet users. E-commerce, or electronic commerce, employs digital devices and internet networks to trade goods and services. 

This quick move from traditional to digital trading is influencing the present economic landscape and developments in several disciplines, including academics, medicine, finance, and government.

E-commerce has emerged as a game-changer in the Indian business due to rising internet usage and smartphone penetration. Businesses have gained tremendous credibility due to their websites, which are now seen as the key platform for achieving competitive advantages and as one of the criteria that determine e-commerce success. 

Digital India, Skill India, Innovation Fund, and other government programmes have supported the country’s digital growth and e-commerce boom. 

In addition, the implementation of a fibre network for 5G will considerably increase India’s e-commerce industry. Scroll down to check the comprehensive details in respect of the role of  E-commerce in MSMEs growth

Easy access to finance for Fin-Tech Players

Given the nature of their business and the labour that they use, MSMEs are in continual need of cash. Often, they run into difficult times vis à vis working capital that impairs the steady supply of raw material. 

The B2B e-commerce players have been offering a helpful hand exactly when an MSME needs courteous convenient access to timely finance through their tie-ups with new-age non-banking finance (FinTech) enterprises.

New age evaluation procedure and collateral-free loans

The FinTech businesses have been able to bring change at numerous stages of loan operations. One of the most crucial components here is giving collateral-free loans.

Digitization of distribution chain for speedier logistical turnaround time

Ensuring speedy delivery and production deadlines become problematic when there are continual delays in obtaining and shipping raw materials and final goods. 

Logistics are thus a key concern in limiting the production of MSMEs. E-commerce players have addressed this issue by using technology and human capital.

Apart from tackling the logistic issue, B2B e-commerce players with significant suppliers as partners enable SMEs to secure great raw materials.

Contributing to the supply chain with cost-saving services

MSMEs rarely have a direct link with their suppliers and customers. Buying from suppliers or selling to customers frequently entails a long chain of middlemen, adding to the prices and complexities of the buy and sale.

 With the introduction of online marketplaces, an MSME can cut through excessive costs and a chain of middlemen to directly interact with its suppliers and customers. Also check the new definition of MSME, introduced by the Indian government.

Customer marketing via e-commerce

Expanding the consumer base generally needs investments that an MSME may find hard to achieve. However, moving their business to an online marketplace enables an MSME to broaden its consumer base to a significant level.

The increasing symbiotic link between the B2B e-commerce sector with Indian MSMEs is a promising start towards addressing some of the traditional difficulties in the sector. 

One can observe the growth of trust and flexibility on both sides as B2B e-commerce platforms offer better, hassle-free and unique solutions to small firms.

Continuous developments like digital payments, hyper-local logistics, analytics-driven consumer engagement and digital ads have helped the e-commerce industry in India to grow at a far faster rate. 

Consequently, we are seeing a rising number of small firms getting onto the e-commerce bandwagon. From leveraging discounts as a strategy to focusing on profitability through ease to easy return policies, personalization, time-bound services and an easier digital interface, B2B e-commerce has come a long way.

What is the Road Forward?

Push for Digitalisation of MSMEs: As India’s economic recovery continues feeble, it would be prudent to help quick India’s e-commerce sector and the onboarding of MSMEs.

Micro, small and medium enterprises (MSMEs) will undoubtedly flourish with technology and digitization of their processes, inventory control and interface with markets, either directly or via the e-commerce ecosystem.

We must purposefully get Small and medium enterprises selling online, as also craftspeople and farmer-producer organisations scattered over India, and provide them marketing help.

Assistance from Tech-Giants: Many technology-based organisations are producing exclusive tools to support micro-enterprises by increasing their business proficiency and profitability.

‘Google Advantage’ is one such programme by Google India that allows MSMEs to exploit the Increasing internet clientele base.

‘Google My Business’ is specially developed to enable startups, and MSMEs in India to prosper virtually.

Easing the PPoB Requirement: The government can simplify the PPoB requirement by making it digital and not requiring physical presence to broaden the reach of MSMEs.

Eliminating the need for state-specific physical PPoB regulations will assist sellers to get state-level GST with a single national place of business.


The recent crisis has touched all the sectors of the Indian industry, especially the MSME sector. All these schemes and efforts not only support MSMEs in terms of growth but also creates a marketplace for them to promote their products and services.

 With the shutdown, the MSME sector went through upheaval due to which they sustained enormous losses and in certain cases shut down. Digital Marketing Agency, can help you to frame strategy and work for the advancement of the company.

E-commerce helps MSMEs enhance revenue, profit margins, market access, marketing and communication, and consumer feedback to improve their services. Though MSMEs in India do not have a foothold in the online business, they engage in online sales in India. 

And keeping in mind the current COVID issue consumers are considering online buying as it is more secure and safe.