How Amazon Business is enabling MSMEs to be part of the $200 billion opportunity in B2B e-commerce
is eyeing the next level of growth in India, with an IBEF report estimating it to be a $200 billion opportunity by 2030. With an increasing shift being seen by businesses from offline to online procurement for access to a wider selection, bulk deals and transparent pricing, the
India
market is gearing up to be digitally well equipped for a makeover.
B2B e-commerce platform, Amazon Business, aims to be at the forefront of this
digital transformation
, with a specific focus on the
MSME sector
. Mitranjan Bhaduri, Director,
Amazon Business
says that procurement often feels like a navigating maze for MSME buyers due to multiple vendors, inconsistent pricing, and lengthy processes. 'Take, for instance, an artisanal food producer located hours away from the nearest city. Earlier
MSMEs
struggled with basic procurement of farming equipment and supplies. Today, they can source everything from seedling trays, coco peat to cleaning supplies through our marketplace, eliminating geographical barriers,' he states.
For the 16 lakh sellers, the platform offers access to varied business customers. Approximately 31.5% of the platform's sales come from sellers based in Tier 2+ cities, and over the past 3 years, sales have grown 1.4 times from sellers in Tier 1 cities and metros.
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It simplifies selling for MSMEs through three key solutions – firstly, connecting sellers to business buyers through the B2B marketplace, secondly a B2B Central tool which helps sellers handle bulk orders. Sellers can manage price quotes, negotiate terms with buyers, and track large business orders in real-time through the tool. Thirdly, tax compliance is streamlined through automated monthly reports, which track all B2B transactions and compile the necessary documentation for GST filing.
Such digital solutions also sync up with The
Digital India programme
launched by Prime Minister Narendra Modi on July 01, 2015 with an aim to transform India into a knowledge-based economy and a digitally empowered society. 'The programme is centred on three key vision areas–digital infrastructure as a core utility to every citizen, governance and services on demand and digital empowerment of citizens. The overall goal is to ensure that digital technologies improve the life of every citizen, expand India's digital economy, create investment and employment opportunities, and create digital technological capabilities in India,' a PIB release elucidates.
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Since financial constraints continue to be a roadblock for the MSME sector, Amazon Business looks at addressing this credit gap through financial solutions. 'Through Amazon Pay Later, eligible businesses can access 30-day interest-free credit, which can be extended to 12 months at minimal interest rates. This has helped them to make procurement decisions based on actual business needs instead of waiting for cash availability,' Bhaduri adds.
In terms of critical challenges faced by businesses in procurement, he says that some of the main ones include lack of a consolidated source of selection, leading them to manage a long tail of offline suppliers; getting compliant GST invoices across such fragmented suppliers; geographic and supply chain limitations and language barriers that restrict digital adoption.
The platform seeks to address such gaps by creating a transparent marketplace where businesses can compare prices, access bulk discounts as well as be a part of a widespread delivery network where location ceases to be a barrier for quality supplies.
There have been other noticeable trends, too. 65% of the orders on the platform now come through mobile, especially in tier II and III cities. Voice shopping and enabled buying experience in seven regional languages have accordingly been introduced to make procurement more inclusive for businesses across the country.
Going forward, Amazon Business is looking at expanding their selection, accelerating delivery speed, and enhancing pricing via advanced AI and digital tools. 'Our goal is clear – helping Indian businesses improve profitability, reduce working capital strain and scale faster in a digitally driven economy,' Bhaduri states.
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