An opinion piece in @bsindia by a @NITIAayog advisor talks about bringing MSMEs into e-commerce. The writing in the article – by a policy advisor – itself shows what is wrong with the lack of inclusion as the advisor puts it ... business-standard.com/article/opinio…
The advisor @ishtiyaqueirs gives broad stats - 60 million + MSMEs, some marketplace stats ... and includes poor digital literacy and poor geographical reach among reasons for the lack of inclusion – and this is where he starts going wrong
The challenge of applying broad brush strokes @ishtiyaqueirs is here: 40% of Indian MSMEs are rural, an abysmally low percentage are served by well-connected infrastructure, supply of power to them is terrible, bribes at police check posts are rampant ...
All these add to transaction costs in any retail business, let alone e-commerce. Therefore e-commerce companies / marketplaces first do business with MSMEs that do not slap on massive costs to their supply chain.
To dismantle the argument offered further, digital literacy is not poor. With 500 million Indians on the Internet, almost all the MSMEs – including an overwhelming rural MSMEs are connected and digitally-literate. To transact digitally, you just need to be numerically literate
The challenges that e-commerce companies have in sourcing from a large swathe of MSMEs is – poor quality control and poor infrastructure including roads and electricity. The challenge of poor infrastructure is well understood, but poorly tackled in India
Another challenge is extremely poor government systems to onboard and assist businesses. The chest thumping of improvement in ease of doing business in India is looked upon as ludicrous by business persons as it means nothing (more on that in some other tweets)
A perusal of annual reports of the MSME ministry shows that many peripheral issues are granted centerstage and key issues such as the ones outlined above are not even mentioned.
Do you know that, despite the e-way bill system – which even though rather poorly designed from a software and user experience perspective – businesses have to pay hefty bribes and set aside a portion of revenues to adjust for them
Do you realize @ishtiyaqueirs that, while some of the bribes are on account of corrupt officials who follow a round-robin method to extract bribes, a whole lot of others are because of poor enforcement (with the businesses / transporters being responsible in part)
Overloaded trucks going unchecked because someone did not enforce checks, transporters fearing arson or pilferage - because there is little policing across the up and coming expressways and so on – the thing is, you cannot apply broad brush strokes to why MSMEs are not included
And @ishtiyaqueirs – what do you mean by the cliquish nature of e-commerce sellers? If there are systemic inefficiencies left alone like open & rotting wounds, there will be people who will come and make hay while the sun shines ... this is not a new phenomenon
And @ishtiyaqueirs – what kind of a solution is a "universal e-commerce interface which is seller-agnostic .." What you write here is a set of high-brow and incomprehensible but sweet-sounding collection of phrases.
It is good @ishtiyaqueirs to trigger a debate with such phrases so long as you promise to define what you want, so long as you promise to hold a debate among businesses to help you define (similar to the Account Aggregator system defined, created, and rolled out)
So, while @ishtiyaqueirs , I found your article superficial, what I and many (many) businesses would want is if you would follow through with something meaningful and impactful. It is not as though you have started on the wrong footing –
– just that you mistake the tip of the iceberg to be the entire problem. So long as there are business persons to show you where all you can see, and so long as you are willing to do so, we can together do a lot, @ishtiyaqueirs
So do not vilify the e-commerce sector. Acknowledging that the e-commerce sector has actually brought about the inclusion of many MSMEs into the economic mainstream – all in just over a decade – and all on account of the skills of a few entrepreneurs ....
This massive inclusion has happened in a very short period, when the government infrastructure and policies (all kinds of them) have woefully struggled to keep pace. So @ishtiyaqueirs, what we shall be looking forward to is ....
A deeper explanation of what is meant by the universal e-commerce interface – is it a digital platform, is it a complete service, is it a movement ? What does @NITIAayog think? And, @ishtiyaqueirs - an acknowledgement of the systemic goof ups as well, please
