Digital Business Comes as a New Business Opportunity for Small Businesses
- BY Jaspreet Kaur
Feature Writer, BusinessEx
- Jun 15,2021
- 12 Mins Read
Amid the ongoing pandemic, a new opportunity has arisen for small businesses. Digital adoption is helping out companies in surviving the brunt of the economic recession. It is like a share investment wherein if a person is already holding shares, he may receive high ROI while new stakeholders would not receive good interest. Therefore, entrepreneurs that established their digital business long ago can survive in the market while businessmen, who just ventured into the digital realm, do not attract customers easily.
The scope of digital business has increased tremendously over the years. According to the Financial Express report, Paypal published a report stating that pandemic-led growth in e-commerce adoption and digital payments, which has enabled seamless cross-border trade, represents a $526 billion opportunity in exports for small businesses to benefit. Amid this, approximately 60 per cent of exported items are goods that demonstrate a $313 billion market of India's local artisans of tribal products, handicrafts, or small exporters of gems and jewellery. Some of the best performing sectors are gems and jewellery, ready-made garments, leather products, electronics, and handicrafts, clocking in $60 billion – about 19 per cent of the total goods exports.
"This (digital adoption) presents a global opportunity, especially for small businesses and entrepreneurs who have reworked their business models from offline to online… The advantage to leverage the global B2C demand is endless as adoption of online shopping has opened the floodgates to purchase custom-made goods from anywhere in the world," Paypal said in its Cross Border Trade report 2021.
According to a report by MeitY, e-commerce in India could add $15 billion to $20 billion in 2025, with e-tailing gross merchandise value accounting for around 10 to 15 percent of total trade in the country in that year.
Export Market - a Good Business Opportunity
With the onset of the pandemic, different trends were viewed in the business realm. A surge in the export market was witnessed. The above-cited report by Paypal stated that non-business-to-business (B2B) exports account for 22 per cent (worth $70 billion) of the total goods exports market. Gems and jewellery had the highest export market share worth $34 billion followed by $16 billion by ready-made garments, $5 billion by leather products, electronics' $3 billion, and handicrafts' $2 billion.
In May this year, PayPal had introduced an automated process to obtain the monthly Foreign Inward Remittance Advice (FIRA) for MSME exporters and freelancers. At a zero cost, PayPal merchants can download their monthly digital FIRA issued by the bank by logging into their PayPal account. The fully automated process doesn’t require sellers to place manual and individual requests. Foreign Inward Remittance Advice is a document that acts as proof for all inward remittances and payments received from abroad.
PayPal Aiding Small Entrepreneurs
Similar to other giant companies, Paypal also started helping small businesses, especially MSMEs. This year, the company joined hands with digital lending platform, FlexiLoans to provide collateral-free business loans to freelancers, women entrepreneurs, sole proprietors, and MSME. The financial aid will help borrowers in business expansion, purchasing stock, inventory, and other business-related expenditures. The tie-up enabled borrowers to secure term loans from INR 50,000 up to INR 1 crore for a tenure ranging from 6-36 months.
The information exhibits that digital business is the next big niche. Small businesses should gauge this realm and accordingly, step into the sector.
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