Indian Transport & Logistics

Challenges faced by MSMEs in adopting e-commerce tech, SaaS logistics

Challenges faced by MSMEs in adopting e-commerce tech, SaaS logistics
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Over 110 million people are employed in the industry, and it generates 30 percent of India's GDP, according to the Ministry of Micro, Small, and Medium Enterprises. In rural and semi-urban regions, in particular, these companies constitute the engine that propels innovation, entrepreneurship, and inclusive development. Despite their importance to the economy, these companies have found it challenging to implement e-commerce and SaaS solutions, which are becoming more important for development in the digital era, due in large part to the digital divide.

Embracing e-commerce and SaaS solutions may help micro, small, and medium-sized enterprises (MSMEs) reach a wider audience, boost productivity, and break into international markets. However, many SMEs lack the capital and personnel to implement these innovations. To guarantee that micro, small, and medium-sized enterprises (MSMEs) have the resources they need to succeed in the digital economy, the public and private sectors must collaborate to close the digital gap. Here are some of the challenges that small enterprises need to surmount in order to succeed in the dynamic digital world.

Channelize a proper internet infrastructure
Lack of access to high-speed internet, digital payment choices, and e-commerce platforms are just some of the digital infrastructure necessities that are still unavailable to a significant chunk of India's small companies. Only around 48% of India's population has access to the internet, which means that a substantial section of prospective buyers is left out of the ecosystem of e-commerce.

Additionally, many startups in India do not have the resources or the technical skills required to set up and maintain an e-commerce store. This makes it difficult for these businesses to compete with bigger enterprises that have far more resources at their disposal. Without the necessary technological infrastructure, smaller businesses and merchants may find it difficult to compete with larger companies in the e-commerce space and to reach consumers outside of the region in which they operate. The fact of the matter is that this is one of the most significant drawbacks that smaller businesses face today, and if the situation is improved, then small-scale entrepreneurs can achieve the ultimate e-commerce toolkit to propel their potential.

Limited funding leaves blocks MSMEs from stepping in the digi-direction
Small businesses striving to enter the e-commerce industry might face substantial obstacles due to restricted options for funding alternatives. E-commerce requires considerable investments in technology, marketing, and logistics infrastructure, making it difficult for many small businesses to procure the necessary funds to establish as well as sustain an e-commerce operation. Small businesses frequently lack the security interests and credit ratings required to qualify for conventional bank loans, which is one of the primary obstacles they face when seeking funding. In addition, venture capitalists and angel investors may be reluctant to invest in small businesses with limited growth potential or an unproven track record.

Consequently, many small businesses may be forced to fund their e-commerce endeavors via personal savings, loans from family and friends, or loans from alternative lenders with high interest rates. This can place a substantial strain on the company's finances and limit its ability to invest in crucial areas such as website development, digital marketing, and supply chain management.

Lack of digital literacy a reason for unrealized digital potential
India's small business owners' aspirations are to get on the e-commerce bandwagon, but they are faced with a limited understanding of digital literacy. To succeed in e-commerce, you need to be tech savvy and skilled in areas like website design, internet marketing, and social media management. Numerous small business proprietors in India may lack the digital skills necessary to effectively leverage e-commerce platforms and tools. This may make it challenging for them to enter the digital market, expand geographically, and compete successfully with renowned retailers on the internet. Lack of proficiency with computers also increases the risk of cybercrime and data loss for small enterprises. Cybercriminals may target smaller businesses because they have fewer resources to safeguard themselves, making them susceptible to attacks that might result in the theft of sensitive consumer information and monetary loss.

The final summation
MSMEs encounter four elementary limitations when it comes to embracing fresh technological advances: time-based constraints,limited skills, reduced accessibility, and budgetary limitations. The biggest hurdle in introducing new technology is the time investment required to pick it up and integrate it.

Also, when talking about MSMEs, the budget plays a key role in deciding whether or not a product will be accepted or rejected in the business world. When buying a SAAS platform, sellers may put more stress on shipping rates that are cheap, but the main goal is to improve shipping operations from a business point of view. The third problem has to do with accessibility. When it comes to choosing SaaS transportation options, the lack of high-speed internet, power, and digital infrastructure can make it hard to meet basic requirements. The fourth task has to do with how knowledgeable user is. Micro, Small, and Medium-Sized businesses (MSMEs) often have few employees and may find it hard to get the tech skills they need to build and manage e-commerce platforms and combine them with Software as a Service (SaaS) transportation solutions.

Due to the fact that they are small businesses, they may worry about the security of payment platforms and the safety of customer data. Due to limited resources and cash, it can be hard for MSMEs and their customers to put protection measures in place, leaving them vulnerable to online dangers. Also, it is thought that MSMEs might be somewhat resistant to change since these changes could have a big effect on their current business plans and ways of doing things. But it is clear that for MSMEs to break in and take advantage of new possibilities, they will have to make e-commerce a part of their everyday routines.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Indian Transport & Logistics News.

Zaiba Sarang

Zaiba Sarang

Zaiba Sarang is the co-founder of iThink Logistics

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