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Pankaj Tyagi
| Updated: 29 Nov, 2021 | Category: MSME

Contribution of E-commerce in MSMEs Growth

Contribution of E-commerce in MSMEs Growth

By bringing e-commerce, technological improvements have transformed the traditional method of doing business into the digital realm. This technological advancement has resulted in a significant increase in internet users. E-commerce, or electronic commerce, uses digital devices and internet networks to trade goods and services. This rapid shift from traditional to digital trading is influencing the present economic scenario and trends in various fields, including academics, medicine, finance, and government. E-commerce has emerged as a game-changer in the Indian industry due to increased internet usage and smartphone penetration. Businesses have gained significant legitimacy due to their websites, which are now seen as the primary platform for gaining competitive advantages and as one of the variables that determine e-commerce success. Digital India, Skill India, Innovation Fund, and other government initiatives have aided the country’s digital advancement and e-commerce boom. In addition, the deployment of a fiber network for 5G will significantly boost India’s e-commerce industry. Scroll down to check the completed information in respect of the contribution of E-commerce in MSMEs growth.

Meaning of MSME

MSME (Micro Small Medium Enterprises) is an acronym for Micro, Small, and Medium Enterprises. The Government of India introduced it following the MSMED (Micro, Small, and Medium Enterprises Development) Act of 2006. According to this act, MSMEs are businesses that deal with the processing, manufacture, and preservation of goods and commodities. In the Indian economy, MSMEs play a pivotal role in the growth of any sector, regardless of the industry or domain. However, since the Internet’s inception, MSMEs have grown in strength like never before by catering to an online clientele. The Internet was previously a weakness of Indian MSMEs. Still, as time passed, the defect became a strength, and e-commerce has eventually proven to be a game-changer for Indian MSMEs.

Latest amendment in respect of MSME

The MSMEs are classified into two divisions:

  • Service Enterprises – businesses that provide or render services in any sector. 
  • Manufacturing enterprises – companies that manufacture or produce things in any industry. 

Given below the details of the latest amendment in MSMEs:

Classification Micro Small Medium
Manufacturing & services Investment < Rs 1 crore and turnover < Rs 5 crore Investment < Rs 10 crore and turnover < Rs 50 crore Investment < Rs 20 crore and turnover < Rs 100 crore

What do you understand by the Term “E-commerce.”

Before discussing the contribution of E-commerce in MSMEs growth, let’s first understand the meaning of E-commerce. E-commerce refers to the buying and selling of goods and services over the Internet and the transferring of funds and data to complete the transaction. Electronic commerce, or internet commerce, is another name for it. Today’s e-commerce inquiries mainly revolve around which channels are ideal for conducting business online, but one of the most bothersome issues is how to spell e-commerce correctly. The truth is that there is no such thing as right or wrong, and it all boils down to personal preference. E-commerce is considered to be the buying and sale of goods and services over the Internet and the movement of funds and data to complete the transaction. Electronic commerce, or internet commerce, is another name for it. 

Role of E-commerce in MSMEs Growth

Whether state or central, the government of India[1] has consistently recognized the potential of Micro, Small, and Medium Enterprises (MSMEs) in India and the significant role they play in the Indian economy on numerous platforms. MSMEs play an important role in the growth of any sector, regardless of the industry or domain. However, since the Internet’s inception, MSMEs have grown in strength like never before by catering to an online clientele. The Internet has initially been a weakness of Indian MSMEs. Still, as time passed, the defect became a strength, and e-commerce has eventually proven to be a game changer for Indian MSMEs., offers his insights on how e-commerce has been a game changer for Indian MSMEs. It was inevitable that e-commerce expansion would have a significant impact on India’s SMEs. Furthermore, the backbone of the Indian economy, i.e., MSMEs, is booming, thanks to the e-commerce industry’s direct impact on the MSME sector, which has been aided by numerous allied forces such as financing and technology. The e-commerce market is already expanding at a breakneck pace, and MSMEs are following suit. The positive cascade impact has been witnessed in India as a result of e-commerce development. 

How E-commerce Helped MSMEs to go global

The significant contribution of E-commerce in MSMEs growth is worldwide; E-commerce worked a lot for the development and expansion of MSMEs throughout the world. However, even with the help of smaller MSMEs, they use e-commerce to promote their products, merchandise, and services around the world without spending a lot of money on expansion and relocation. E-commerce has become linked with economic growth and sustainability for small businesses. E-commerce has aided MSMEs in overcoming all business obstacles, resulting in a greater audience and increased revenue.

Conclusion

In conclusion, we conclude here that the contribution of E-commerce in MSMEs growth is significant, E-commerce is a passage that allows even the smallest MSMEs to showcase their products in any part of the world without having to pay out money on expansion or moving locations, and it is a passage that allows even the smallest MSMEs to showcase their products in any part of the world without having to pay out money on expansion or changing locations. Small businesses have benefited from these platforms since they have removed barriers, provided a considerable consumer base, and thus increased sales. E-commerce platforms are likely the best promoters for MSMEs’ growth and development, leading their transformation at low expenses, investment, and innovation. The government, the commercial sector, industry associations, training organizations, and SMEs are all working together to make this happen.

Read our article:MSME Registration – Know the Entire Procedure

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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