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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

E-commerce: Pushing Boundaries for Small Businesses in India

Nayan Thakkar
Friday, June 1, 2012
Nayan Thakkar
With more than 121 million internet users as reported by IAMAI, the internet economy in India is on a steady growth trajectory. Small businesses in India have begun to harness the opportunities available through e-commerce in overseas markets. The exporting community is gradually realizing the potential of e-commerce as a strong tool to cut through to international markets. According to a recent FIEO report, exports through the e-commerce route in the last three years have grown by over 400 percent to $1.4 billion. Even the recent budget announcement made by the Finance Minister emphasized reaching out to unconventional and untapped markets which will enable us to deal in global trade. During my time as Manager, Sales and Customer Support at Alibaba.com, I have met several exporters who have adopted e-commerce to establish their global footprint through e-commerce in a simple and effective manner.

The journey to export has not been an easy one for Snehal Creation, though. Before discovering e-commerce, as a family business with more than 30 years of experience in the market, Mahesh Agarwal, CEO, felt that his business of manufacturing, wholesaling and exporting ethnic Indian wear for women and children was slowly coming to a standstill, in spite of supplying to local exporters and a few overseas buyers. To take the business to the next level, he joined Alibaba.com and leveraged e-commerce to grow the business. The results of which were extremely encouraging as they received a lot of inquires from various international markets.

With the help of e-commerce, Mahesh receives numerous global enquiries, with 40 percent of these enquiries being driven from Alibaba.com alone. Mahesh is able to convert approximately 60 percent of his enquiries into real orders. Mahesh’s sales have been proportionately rising along with his orders and the revenue he makes. Snehal Creation exports to countries across the globe, but majorly to countries like U.S., Canada, UK, Australia and Western European countries. Mahesh told us that when his business was going through a rough phase, help came from the most unexpected source - the Internet. Alibaba.com has proved to be a life-saver for his business.

The success of Snehal Creation exhibits that while customer acquisition costs for small businesses in the country have realized that being cost effective is essential to staying competitive in global markets. One of the biggest advantages of e-commerce for an SME is that it provides access to buyers across the world at a limited cost. SMEs were skeptical to target new export markets where traditional costs of entering are higher when compared to acquiring new clients domestically - long distance phone calls, printing and shipping catalogues, traveling to foreign countries and other allied expenses. We are seeing an optimistic trend of SMEs willing to cross borders and make a mark for themselves in international markets. With the changing environment, SMEs will find it far easier to introduce cost effective mediums, like e-commerce, to their business.

While interacting with SMEs around the country, I also learned how SMEs are re-visiting their marketing strategies. Traditionally they spent a large chuck of the marketing pie in traditional channels of promotion like participation in trade shows and exhibitions, weighing heavily on their pockets. Not only were these events costly, but are also highly time consuming. We see this trend changing as adoption of e-commerce grows, Indian small business are beginning to focus on the bottom lines to stay competitive in global trade.

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