Home / News / India /  64% of MSMEs saw online sales grow in the last 12 months: survey

As the pandemic continues to accelerate adoption of technology, almost 64% of startups and micro, small and medium enterprises (MSMEs) have seen higher sales via digital or e-commerce channels in the last 12 months, according to a survey conducted by community-led social media platform, LocalCircles.

As a part of the survey, 28% of startups and MSMEs said their digital sales doubled or increased by five-fold in the past year, while another 23% said that their sales through digital channels grew by 50% to 100%.

Only 13% said that sales through digital channels increased by up to 50%, while 18% of respondents reported no change.

“Digital or e-commerce channels have become mainstream for India’s MSMEs and startups for selling their products or services to consumers, with 64% of small businesses saying their sales via digital channels as a percentage of their total sales saw growth in the last 12 months," said LocalCircles.

According to the survey, almost 26% of MSMEs said that they have increased listings of their products and services on e-commerce platforms or aggregator websites. MSMEs and smaller startups participating in the survey also said that they have upgraded their website or app, allowing customers the option to pay digitally.

In response to the recently proposed amendment to the Consumer Protection (E-Commerce) rules, 2020, several businesses have voiced their concerns over the appointment of a resident grievance officer, restrictions on sales events and updating product information. Almost 25% of the MSMEs participating in the survey considered all three factors as major concerns for doing business online. While the rest of them recognized at least one of the issues mentioned above as a point of concern for online sales.

A total of 24% of MSMEs only said that they either do not have any area of concern or didn’t have an opinion on the proposed amendments by the government to e-commerce rules.

“If concerns raised by MSMEs and startups regarding the new Consumer Protection (E-Commerce) rules, 2020 are evaluated in the order of priority, it suggests that 57% of the small businesses find it difficult to update product information like country of origin, MRP, best before date/time, etc., on a regular basis. Furthermore, 57% raised the concern of appointing a grievance officer and timely handling of grievances, and 44% raised the issue of restrictions on sales events," said LocalCircles in its survey.

The proposed amendments by the consumer affairs ministry has come as a surprise for the e-commerce industry, with firms and stakeholders seeking major changes in the draft policy. In some cases, industry bodies have also suggested the government scrap these rules and hold fresh consultations with the industry.

The survey conducted on the LocalCircles platform received more than 17,000 responses from over 6,200 startups and MSMEs across 172 districts in India, the company said.

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