MSMEs are the backbone of a country like India. The advent of the
COVID-19 pandemic created a deep divide between businesses and
consumers. This brought a sense of urgency for businesses to adopt
digital technology to fill the gap and opened unexplored vistas of
growth and many of them, including small and medium businesses,
started exploring new ways to optimize business processes and engage
a higher number of vendors and customers. It is this new market
scenario which led to a significant increase in the participation of MSMEs
in online selling, social commerce, and cross-border trade. MSMEs
can enhance cross border trade by variety of means if implemented
properly.
SME participation in a globally integrated economy mentions the complexity
in trade and cost of trade as the most significant constraints for SMEs to
participate in the global value chain and this becomes a primary reason for
them to identify new ways of solving these problems. Distributors and
aggregators rely on intermediaries due to a lack of reliable discovery options.
Even when they connect with retailers directly, they depend on middlemen
to sell more than 50% of their products and fill the gap as demand from
established importers/buyers fluctuates. This gap has prevented online trade
from accelerating – leaving both buyers and sellers dependent on
intermediaries.
MSME benefits to traders are totally varied. Many of the traders
operating in the MSME market are always on the lookout for more
participants who are willing and ready to make deals with them. This
encourages new entrepreneurs to collaborate with traders new and old
who have the experience and expertise of operating in the domestic as
well as the international market. Traders can apply for MSME via
particular portal that is mentioned.
For more information: https://smeventure.com/india-and-mauritius-review-bilateral-engagement-for-msmes/
Traditional cross-border trade in most segments such as food and
agriculture market, retail, manufacturing, homecare, fashion, and more
are broken and fragmented as per the current scenario. In fact, MSMEs
looking to sell overseas have been unable to acquire customers and
manage various end-to-end operations, such trade logistics, quality
checks, payments, and more, which has resulted in an unreliable supply
chain across all markets. This obstruction has led to set up a system
which is dependable and consistent and has been a prominent setback
for MSMEs to participate in cross-border trade.
There is also a factor of trust deficit between parties that are involved.
A severe lack of secure and reliable relationships exacerbates the
impending difficulties in processes of navigating international
transactions, quality verifications, tackling country-specific government
regulations and procuring finance (credit & escrow facilities). These
are the prominent roadblocks that can often become barriers for MSMEs
looking to enter the markets and eventually their performance is
hindered.
The primary issue is that these challenges are occurring in a landscape
where an increasing number of small to medium business owners are
invested in expanding their business through online platforms.
According to the MSME Digital Readiness Survey, 29% of MSMEs
believe the business environment in India has improved for online
sales, and 31% believe the cross-border prospect is good. That is far
from the expected percentages although it can accepted that these
numbers are growing day by day.
SMEs and MSMEs are finding new ways to finance their business and
making them ready for the global stage. It is extremely important for
the MSMEs to make sure the trade logistics are figured out early on so
that there is minimal interference and issues later on regarding the
transportation of the goods. It is abundantly clear that a large chunk
of the procedural setbacks being faced by MSMEs as they move towards
digital lies in a lack of streamlined processes. The refinement of these
can help to improve efficiency and lower the barrier of entry.
It has become increasingly evident for the MSMEs to have a strong
support system that helps to keep their business running efficiently.
There are many processes like quality inspections and material
verifications and other day to day activities regarding cross border trade.
Saas products are also helping in doing MSME exports by helping the
businesses by digitizing and creating e-catalogues for the clients on the
run. This proves to be very time efficient for the exporters and thus in the
elimination of the disorganization in the whole process.
Do watch: https://www.youtube.com/shorts/mxmhEv0xPgM
In the coming years, it will be of extreme importance for all the
exporters to identify the market opportunities that are available in the
market and thus position their products in the most efficient ways so
that it serves the markets accordingly. This is the primary reason why
traders can apply for MSME based businesses early on and get a hang
of all the processes that are a part of the system of MSME industry.
There are a lot of MSME benefits to traders who are actively
participating within the confines of this industry. Cross-border trade is
going to become the norm for business owners across markets. But to
stack the odds in favor of growth, we need to address the existing
challenges of heavy dependencies, unreliable supply chains, and trust
deficit between parties. With an increasing number of start-ups already
disrupting traditional models to provide support to MSMEs, the sector
is also buzzing with entrepreneurial energy, making it a magnet for
investments.
It is time we recognize the opportunities that are currently available for
the MSME participants and the traders and enable all of them to take
their business to the global market and thus enrich the business at the
regional level by providing more employment at home and thus
increasing the overall quality of life. There is a huge demand gap for
good quality products in the international markets and the Indian
MSME system could play a decisive role in filling that gap by enabling
the traders to actively participate and take the products outside the
country and market them to the target audiences. It is also important
to have feedback and that will help the MSME industry scale new
heights in the future.