- December 24, 2019
- Posted by: prerna
- Category: Feed
The Indian economy centres itself around consumption, as more than three fifths of the country are consumers. And though we have seen economic slowdown in sectors like housing, retail loans, automobiles and manufacturing, the FMCG sector is in a much better place. We’re still growing, though the pace of this growth can be debated.
With India’s retail industry set to be worth $1 trillion by 2021, micro, small and medium enterprises (MSMEs) needs new ways to capitalise on this momentum. For new-age retailers, the solution is evident: ecommerce.
The marketplace model of ecommerce is designed to specifically empower small & medium enterprises (SMEs), allowing them to benefit from economies of scale and access a pan-India customer base. In fact, this economic slowdown as an opportunity to grow tremendously if we see it as a chance to understand consumers better and then take calls about distribution and delivery.
Focusing on consumer engagement thus becomes critical if we want to succeed in changing times. The brands have to speak for themselves, and the rest will follow.
Retail and Exports to achieve the US $5 Trillion economy for India?
Currently, e-commerce represents only a tiny 3% of the overall $650-odd billion Indian retail industry (2018). But as its popularity grows, it is opening up opportunities for several underserved sections of society, allowing them to participate and contribute to India’s formal economy.
Hope is also not lost because the India is still better off than the rest of the world facing economic crisis, and this relative comparison should be enough to keep the spirits high. Full category penetration will of course face the brunt more but with limited category penetration, there’s always a chance to connect more with consumers and grow in line with their expectations.
For India, the most important thing to achieve the $5 trillion economy is Retail and Export-import balance. China contributes around 17% to global trade while India’s contribution is a mere 2.6%. For India, this is the best opportunity to increase this to 8-10% in the next few years. Today, costs in China are increasing and a blessing in disguise for India.