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New UPS survey highlights challenges, trends and recommendations for India’s SMBs to compete online globally

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More than a 1000 Small and Medium-sized business (SMB) owners in nine countries weighed in on a recent UPS survey to communicate how they’re doing, what’s holding them back and how they’re overcoming obstacles.

In India, among the 104 SMBs surveyed, 50% were women. Interestingly, more women owned businesses are selling online – both pre and post pandemic, although more men-owned businesses made the transition to e-commerce during the pandemic.

According to the findings, access to information has been “very challenging” for 54% of the SMBs engaged in exports. This is followed by navigation of export duties and taxes and facilitation of shipping and trade logistics at 46% each. SMBs also cite supply chain disruptions, learning about and complying with digital laws and regulations, and management of online sale platforms as e-commerce challenges in 2022. SMBs were equally interested in growing their e-commerce exports as they were in expanding in-person sales within the country for the next two years.

Why Are Some SMBs Not Selling Online?
SMBs that are not currently selling online do see the benefits of e-commerce. 33% of surveyed SMBs were not currently selling online. Of these, a large majority (76%) believed that e-commerce would be beneficial to their business.

Top four constraints to SMB expansion to e-commerce:
• cybersecurity and online safety (76%)
• set up and management of e-payments (76%)
• recovering the cost of e-commerce fees (74%)
• Access to financing for upgrading to e-commerce (74%)

Nearly two-thirds of respondents found access to reliable internet as “very” or “somewhat” challenging

The key survey takeaways:

  • Expand SMB Access to Information About E-commerce: Government-sponsored trainings and resources could support more access to information about setting up and running e-commerce businesses, complying with digital laws and regulations, and international trade.
  • Support Supply Chain Resilience: Provide information and resources for SMBs to build more resilient supply chains by forecasting demand and threats, diversifying suppliers, and digitizing supply chain processes.
  • Strengthen Digital Infrastructure: Expand investment into a broad set of digital tools to address SMBs’ concerns regarding challenges managing e-payments, inventory, returns, and contactless delivery
  • Simplify E-commerce Rules and Regulations: SMBs indicated that simplification of e-commerce business regulations, taxes, and fees would be helpful. 26 percent of SMBs not currently engaged in e-commerce identified such simplification as the government intervention with the greatest potential.
  • Boost Financing: Access to finance was identified as a barrier by SMBs. The government should scale-up existing government financed business credit offerings, whether through increasing the volume of financing available or encouraging more small businesses to take advantage of existing programs through awareness-raising initiatives.

In India, UPS collaborates with the Ministry of MSME, Government of India, for the India SME Forum, which is a platform to share knowledge and information to better equip the SMBs get exposure to new cross-border business opportunities, and encourage entrepreneurs to scale, innovate, and increase productivity. UPS and The UPS Foundation have collaborated with ITC SheTrades in their shared mission to help women-owned businesses succeed in international markets by providing training, skills, and growth opportunities that allow them to better understand and benefit from international trade.

UPS has expertise in the concern areas cited by SMBs – the more they understand the needs of SMBs, the more they can develop tools, technologies, and solutions designed to help SMBs grow their exports, operate more efficiently, improve their customer experience and advocate for trade policies that level the playing field.

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