69% of MSMEs prefer digital wallets and mobile payments

ICRIER’s annual survey highlights that MSMEs integrated with e-commerce platforms in India are experiencing significant increases in turnovers and profitability, with over 85% of them reporting improved sales and profit margins.

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The India Council for Research on International Economic Relations (ICRIER) reported on Monday that micro, small, and medium enterprises (MSMEs) integrated with e-commerce platforms are experiencing higher turnovers and profitability compared to non-integrated ones. 

The annual survey on MSMEs conducted by ICRIER revealed that over 85% of the surveyed enterprises reported an increase in total sales and profit margins after integrating with e-commerce channels, with most reporting growth of up to 30%. Additionally, approximately 14% of integrated firms reported hiring new employees.

ICRIER emphasized that while the volume of sales through e-commerce platforms is relatively small compared to traditional routes, there is significant potential for MSMEs to increase their share of online sales in total sales.

The survey, conducted between November 4, 2022, and January 20, 2023, included 2,007 MSMEs from various product categories such as sports goods, toys, processed and preserved food products, apparel, furniture, and handicraft products.

Among the challenges faced by MSMEs, the inability to access markets, retain customers, and effectively market their products were cited as top concerns in the report. The think tank highlighted the importance of effective coordination between central and state governments and the need for a comprehensive MSME policy that consolidates policy incentives and programs. It was also noted that governments should work on creating greater awareness about the various incentives and programs available to MSMEs.

In addition to market access challenges, the surveyed MSMEs mentioned other issues such as physical infrastructure bottlenecks, limited access to credit and skilled labour, and problems related to delayed payments.

The survey also collected information on key performance indicators, including sales, employment, and profitability, and highlighted that firms with an export-oriented focus were more likely to integrate with e-commerce platforms, indicating a positive relationship between e-commerce orientation and adoption.