EDITION VII

COLLABORATE TO INNOVATE

Promoting Cross Border E-Commerce

for Indian MSME Sector

A MSME Product – MADE IN INDIA Team: Solo Athlete

College: IIM Shillong

1

Solution

To address the problem at hand

How to increase B2C Exports from India in MSME space

Marketing & Branding MSME Education

• Niryat Mitra

• Niryat Saathee

• Niryat Prakaashan

• Niryat Parichay

• Niryat Jaagrooktha

• Niryat Abhyasika

Team: Solo Athlete || IIM Shillong

Identification of

Products & Markets

Establishing E-Commerce

Industrial Park

Analysis of CBT

Pillars for B2C Trade

Miscellaneous

Recommendations

One Nation One Brand

Gifting Strategy

Identification of

Products & Markets

2

Rationale of products in this scheme is based on higher preference of consumers to buy

in CBT or in B2B trade

Markets

Parameters for classification

Online Shopping

• E-Shopping penetration

• Average spending/ buyer

Digital Buyers

• Absolute no. of buyers

• Growth rate

Categories/ Products Target Market

Clothing and footwear Russia

Books Australia, South Africa

Jewellery Thailand, South Africa

Toys Chile, Brazil

Sports goods Turkey

Mapping of products and markets. Source: Amazon, FICCI

List of markets analysed on above

parameters is mentioned in Exhibit 3

Team: Solo Athlete || IIM Shillong

MEIS E-Commerce Scheme

Handicrafts

Handlooms Leather Goods Toys

Books Cust. Garments

Exports in FY18 ≈ $ 300 Billion

MSME’s contribution ≈ 40%

Mapping of complete list of products and markets is in Exhibit 4

Potential categories identified in B2C

CBT for Indian MSMEs: 17, top 4 are

Gems & Jewellery

Footwear

Auto Parts

Apparel

CBT E-Commerce

Industrial Park

3

23 TEE locations with

potential B2C categories

Team: Solo Athlete || IIM Shillong

CBT E-Commerce Industrial Park:

Collaboration Model

• MSMEs/ Cluster(s)

• E-Commerce Marketplace(s)

• Logistic Service Provider(s)

• Govt. Agency(s)

Facilities includes whole industry chain of CBT

E-Commerce like warehousing, customs

clearance, training centre etc.

North Region

• Panipat

• Jodhpur

• Gurugram

South Region

• Tiruppur

• Ambur

West Region

• Surat

• Ahmedabad

Locations

13 North Region

4 West Region

6 South Region

CBT Pillars

Analysis of Technology & Internet pillar

4

CBT E-Commerce Pillars

Policies &

Schemes

Technology &

Internet Logistics &

Supply Chain

Infrastructure &

Customs

Technology

& Internet

E-Commerce Readiness

IIFT survey on MSMEs

• Use of computers with

internet: 60-70% workforce

• Major communication mode

with buyers: Email

• Website for products display,

not transaction enabled

Internet penetration

• India ≈40%

• Rural ≈21%

Challenges in

E-Payment System

• Lack of financial inclusion

• Poor knowledge

• Time consuming & costly

• Privacy & security concerns

SMAC: Social Mobile

Analytics Cloud

Globallinker by FIEO

Team: Solo Athlete || IIM Shillong

ICT Barriers for MSMEs

• Cost & lack of awareness

• Poor physical infrastructure

Data Localization

India vs. World

Privacy and Efficiency

Positive

Can’t say

Negative

CBT Pillars

Analysis of Infrastructure & Customs pillar

5 Team: Solo Athlete || IIM Shillong

Customs

Single Window Interface

for Facilitating Trade

SWIFT helps in providing

one stop interaction place

with 40+ Govt. agencies

eSANCHIT – Paperless

processing under SWIFT

From 1st Sept. 2018 onwards

eSANCHIT for exports

implemented on pilot basis

Issues

Indian Customs

EDI System

Majority of ICES locations in

TEE are operated on WAN

bandwidth < 512kbps

Multiple Invoice Copies

Invoices for a single product

shipment are

• India Post: 3

• Private Courier: 7

Shipping

Bills

Postal Bill of Exports

PBE I/ II & CN-22

From 21st June 2018 onwards

• Zero rating in GST

• Sale of Goods in CN22

Courier Shipping Bill V

Boon for Exporters

• Efficient

• Less paperwork

• GST compliant

CBT Pillars

Analysis of Logistics & Supply Chain pillar

6

India ranked 44 in Logistics

Performance Index, 2018 44

Logistics flow of CBT B2C shipments

First Mile logistics

Fulfilment

Processing/ Sorting

Suppliers

of E-Tailers

Warehouse

in park Indian

Customs

Line-haul Delivery

Foreign

Customs Overseas

Warehouses

Overseas

Shoppers

Last Mile Delivery

Transportation

Inefficient local

supply chain infrastructure

Poor infrastructure in terms of

connectivity/ courier services

to nearest customs location

Pain points in postal services

• Long delivery lead time

• Expensive for goods return

• Tracking & tracing issues

National Logistics Information

Portal by DoC

Announced in FY19 Union Budget, it

can reduce costs and processing time

Team: Solo Athlete || IIM Shillong

E-Commerce Connectivity Index

Research study on E-Commerce

connectivity between India & other

countries is need of the hour

(recommended to Govt. agencies)

CBT Pillars

Analysis of Policies & Schemes pillar

7

Policies/ Trade

Agreements

Team: Solo Athlete || IIM Shillong

Foreign Trade Policy 2015-20

e-BRC, e-IEC, AEO are some

of the initiatives undertaken

RTA & India’s Exports

India’s efficiency of using RTAs

to its favour is less. Exhibit 7 has

India’s exports and imports performance

after signing RTAs with ASEAN etc.

Global Trade Agreements

AIFTA, CECA, CEPA, RCEP

E-commerce trade rules were

never part of TAs except RCEP

Schemes

MEIS E-Commerce Reward

Revised on 27th July 2018 to

Rs. 5 Lakh/ shipment from Rs. 25K

Niryat Bandhu Scheme

Hand Holding for Exporters

Mentoring budding exporters on

foreign trade by DGFT, EPCs

Diwali Gift - MSME exporters

On 2nd Nov 2018, Govt. increased

interest subvention on loans for

MSME exporters from 3% to 5%

Miscellaneous

Recommendations

7

SWIFT Mechanism for IGST & ITC

Instant Tax Refund (Ex: E-Wallet)

Delay in tax refund hampers the

working capital of MSME exporters

Team: Solo Athlete || IIM Shillong

Cross Border E-Commerce Zone

Comprehensive Test Area

Project focusses on streamlining

process in logistics, warehousing,

customs and approvals

Clusters Collaboration

Niryat Mitra Mobile App

Exchange of knowledge across

same product segment MSME

clusters in different regions

MEIS E-Commerce Reward

Updating Products in Scheme

Products with higher exports share

like Gems & jewellery, Auto parts etc

National E-Comm Policy Draft

Facilitating Cross Border Trade

GOI should facilitate GeM like portal

exclusive for MSMEs

Marketing &

Branding

9

A MSME Product – MADE IN INDIA

One Nation One Brand - MSME

Promote all Indian MSME products under

one brand to carve Brand India niche

Brand Identification & Recognition

Steps to overcome identity crisis

Mo-MSME support to Indian MSMEs to

participate in global trade fairs is very

minimal. Ex: In 2018-19, Global trade fairs

approved in IC Scheme are <100 whereas in

China alone 3000+ global trade fairs are

planned

Team: Solo Athlete || IIM Shillong

Marketing

Credentials Campaign

Hum Kisise Kum Nahi Hai

• Ease of Doing Business Index

• Zero Defect Zero Effect (ZED)

• Facts & figures on backbone

of Indian economy

Gifting Strategy

MSME products to foreign officials

Indian & foreign officials meetings is

an opportunity to give gifts resulting

in publicity for product

Educating MSMEs

& Conclusion

10

MSMEs Education (Niryat Programmes)

Niryat Parichay

Inductions/ Workshops

Agencies to conduct

category level inductions

with Star Status Holder

Niryat Jaagrookta

Awareness Workshop

Awareness on latest

practices

Niryat Prakaashan

Publications

Research reports in

vernacular languages

Niryat Abhyasika

Study/ Training course

Enable new generation

workforce for MSMEs

CONCLUSION

CBT E-Commerce is different

from traditional trade, Govt.

must recognize B2C exports as

sector to collect data on it

Poor awareness of MSME

products among global

customers to be addressed with

branding, promotional activities

Stakeholders must be up-to-

date on latest tech, infra, policy

environment and immediately

adapt to ecosystem dynamics

Adopting new modes of

business comes at a cost, so

educate MSMEs on infinite

opportunities E-Com. can offer

Niryat Saathee

Intermediary Partners

Private players reach

clusters at faster rate (Annexure 1: Amazon Ad)

Team: Solo Athlete || IIM Shillong

Niryat Mitra

Reach MSMEs Digitally

Increasing MSMEs

enrolment on mobile app

If India buys online, Indians must sell online Goods will be Made in India as well as sourced globally

Think Global, Act Global

Team: Solo Athlete || IIM Shillong

THANK

YOU!