Benefits of E-Commerce for SMEs:
E-Commerce simply means trading or facilitating the trading of products or services using the Internet. Over the past few years, E-commerce, in India, has grown by leaps and bounds and is envisaged to advance exponentially. As per the most recent study, conducted by the Internet and Mobile Association of India (IAMAI), the E-Commerce market is expected to cross 2 lakh crore in 2016. This statistic, when clubbed with the fact that, only 15.1 % of the Indian population uses the Internet, accentuates the growth potential of E-commerce in India.
This promising scenario can emerge as a boon for numerous SMEs across the country that are looking at expanding their reach with limited investment. Let us look at the various benefits, SMEs would enjoy on setting up an online presence.
1. Can sell to the whole world: An online store enables an enterprise to sell to the entire world. Also, with the advancement made by internet technologies, an online presence can be setup at a fraction of the cost of a physical store. This turns out to be a blessing for SMEs who can transcend the limitations of a physical store with minimum investment.
2.Available 24/7*365: An online store is available to its customers day and night, all days of the year. An online store can rightly be called a store which never sleeps. The customers can thus shop at their own convenience.
3.Economical: The money that would otherwise, have been required to setup a physical store can now be invested in some other area of business, like innovation, quality enhancement or increasing production. This makes investing in E-Commerce an economical choice.
4. Improve visibility by using Search Engine Optimization: Customers use search engines to explore the various choices available, while researching about a product / service. Thus, search engine optimization can be used effectively by SMEs to boost their visibility to potential customers and supplement their sales.
5. Decrease Personnel Costs: An online presence requires a complete computerization of operational processes like check-out, billing and payment, thus reducing the total number of employees required to manage the business.
6. Detailed Information available: To equip employees with detailed information regarding all the products / services is challenging. E-commerce helps provide in-depth information about every product / service to the customers with ease.
7. Decrease costs of Inventory Management: There are web-based programs which automates and manages the inventory for an online store. This helps in saving operational costs and time.
8. Analytics: E-Commerce provides a simpler way to evaluate the effectiveness of any campaign, introduced by an SME, with the objective of boosting sales. It assists in appraising the success of marketing campaigns, customer engagement programs, pilot projects and more. It also helps in decoding the spending patterns of customers easily; this assists in understanding the customer needs and offering them suitable products every time they visit. E-commerce is an extremely potent tool to attract and retain customers.
9. Reviews help sell products on its own: A good review on a website can attract potential customers without any additional effort from the owner. Consistent good reviews can propel the sales exponentially and assist in building the brand of the product / service.
10. Cheaper and Competent: An online store can be managed successfully with limited money and personnel. There is no requirement of renting out physical space or to recruit more employees so as to manage increasing sales. Since, the entire store is computerized, it is extremely effective and accurate. All this, cumulatively, leads to higher profits.
These benefits do furnish SMEs with valid assertions for investing in E-Commerce.
As per a CII-Deloitte study, published in April 2016, it was observed that an MSME which had an advanced online presence garnered annual revenue growth which was 27% higher than those with only an offline store.
Even, the government / trade bodies understand the potential an E-commerce platform offers and is taking measures to attract SMEs towards it. Some examples of measures taken by them:
● Last year, the Confederation of Indian Industry (CII) and Alibaba, signed an MOU to build B2B linkages between Indian SMEs and the rest of the world.
● Introduction of initiatives like Technology Centre Framework to provide support for adoption of cloud based technology, by MSMEs.
● A B2C marketplace, MSMEShopping.com was launched by National Small Industries Corporation (NSIC) with no transaction costs with an intent to bring aboard 5,000-10,000 MSMEs by 2016.
E-Commerce is here to stay and will only grow in influence in the days to come.