The consumer behaviour has changed immensely as a result of the lockdown which has been imposed several times in the Indian economy to mitigate the spread of COVID-19. As an impact, the consumers have been more dependent on virtual retail purchases. This is why the Indian MSME sector has witnessed 65% increase in online purchases from their customers.
Because of the convenience, accessibility, and use of digital techniques, 51% of MSMEs saw a rise in spending from existing consumers, while 46% saw an increase in repeat purchases. Based on this changed pattern of consumerism, the Indian small and medium-sized businesses have also started modifying their selling techniques. Currently, 66% of MSMEs utilize social media as an online selling channel, followed by marketplaces (62%), company-owned platforms (61%), own e-commerce websites (54%), and third-party e-commerce platforms (54%).
A few things need to be taken care of for achieving desirable economic growth through the MSME sector-
- Making the labourforce of the MSME sector technically skilled by launching suitable initiatives. A proper technical skill will help the workers handle the online selling process for their businesses in a better way.
- Enhancing cross-border trading. In India, 64% of merchants were associated with such types of trading processes before the outbreak, and 35% used it during the pandemic. During COVID-19, 86% of MSMEs selling globally claimed to have seen an increase in cross-border commerce.
- More investment towards the payment methods. The introduction of new payment methods, improvement of card payments, etc. can be helpful in this regard.
According to the report, 49% of Indian MSMEs plan to invest in technology to improve customer service. Increased customer loyalty and the ability to extend the customer base of the businesses can be beneficial in the long term to achieve an effective business experience.
Source: PayPal survey, IBEF