64% MSMEs and startups saw online sales grow over past one year: Survey

Digital adoption by small businesses accelerated since the outbreak of Covid-19, with as many as 64 per cent micro small and medium enterprises’ (MSMEs) sales through online channels growing over the last 12 months, according to a survey conducted by LocalCircles

Of this, 28 per cent of MSMEs saw their sales grow by 100-500 per cent.

Sachin Taparia, founder and chairman of community social media platform LocalCircles said for small businesses, the key to survival through the pandemic has been their ability to digitize themselves.Those in the direct-to-consumer domain, many of them started their own websites, listed their products on e-commerce platforms or did both.

“The first question in the survey asked startups and MSMEs about the changes in their total sales via digital or eCommerce channels in the last 12 months as compared to the year before. In response, 28 per cent of startups and MSMEs said their total digital sales as a per cent of total sales “increased by 100-500 per cent”, 23 per cent said it “increased by 50-100 per cent”, and 13 per cent said “increased by 0-50 per cent,” according to the findings.

“Breaking down the poll, 18 per cent said their total sales stayed the same as previous year. Only 18 per cent said their sales via digital or e-commerce channels as a percentage of total sales decreased,” it said.

The survey received more than 17,000 responses from over 6,200 startups and MSMEs located in 172 districts.

It further said that digital and e-commerce channels helped small businesses during the pandemic to find new customers, increase transactions with existing customers and keep in touch with them during the pandemic. Over the last one year, many MSMEs upgraded their technology by measures such as scaling their back-end systems, among others.

According to the other findings, 61 per cent small businesses that are selling products and services online are doing it through e-commerce platforms, while 31 per cent are selling through their own website or app. On the other hand, 56 per cent of MSMEs and startups had to say they have started or increased listings on marketplaces and aggregator websites to scale up their business.

“All these are indicators that the Covid-19 pandemic has played a major role in digitizing many of the Indian MSMEs and startups and the time is ripe for them to scale their digital presence further in the months and year to come,” the survey said.

In the context of amendment to Consumer Protection (eCommerce) rules, 57 per cent of the MSMEs and startups are concerned about the requirements to appoint a grievance officer, country of origin among others. Many of the small businesses have suggested that those businesses with less than 5 crores in annual turnover be exempt from such compliance requirements such as appointment of a grievance officer and more efficient ways be found to display product information, it said.

The findings of the survey will be shared with key government stakeholders, an official statement said.