New Delhi, October 11, 2022: The festive season, beginning with Onam and continuing through Durga Puja, Diwali, and Christmas, accounts for about one-third of the overall annual sales value across various categories of the industry. As the country prepares for the upcoming festive season without COVID restrictions for the first time in three years, Indian MSMEs are increasingly leveraging online platforms to drive sales during this period.
The India SME Forum (ISF), India's largest non-governmental, not-for-profit organization for small and medium businesses, launched a report titled “MSMEs & The Festive Economy” which suggests 76% sellers opted to sell their products on e-commerce platforms to survive the pandemic. According to the report, which aims to capture the plan and readiness of the MSMEs for the upcoming festive season, 72% of MSMEs prefer to sell on e-commerce platforms during this time.
Vinod Kumar, President, ISF, said, “The festive season is a great opportunity for sellers to introduce new and innovative products, and drive sales by offering discounts on e-commerce platforms. Selling online helps reach a wider audience, and enables them to build an omnichannel presence, providing the convenience of both online and offline.”
The report suggests seasonal hiring, training personnel, diversifying into new product categories, and promotion and discounts were the key focus areas for MSMEs during the festive season, with promotions and discounts being the top priority. Key challenges, on the other hand, were related to product return and refund policies, price and shipping, gaining customer loyalty, and providing the right customer experience. Some other key findings include:
- 84% MSMEs have incorporated digital technologies in their business after exposure to e-commerce.
- 56% MSMEs plan to launch new products during the on-going festive season.
- 30% of sellers use an e-commerce platform to create a distinct brand identity, 45% use to acquire new customers, and 25% use to engage with repeat customers acquired through these platforms.
E-commerce like Amazon and others have democratized shopping by lowering the entry barriers for businesses. It has been a hub for generating millions of jobs, especially during the festive seasons. With many online platforms offering up to 50% off on their selling fees, the festive season provides an excellent opportunity for MSMEs to enter into the e-commerce space.
Mr. Kumar added, “As we approach the peak season, sellers should be prepared to manage logistics, inventory, capital and credit system, and customer service. The acceptability of Indian brands globally is also a major reason for Indian MSMEs to export through e-commerce and reach out to consumers directly in other geographies. We have seen presence of Amazon in B2C exports which has been beneficial for MSMEs.”