E-Commerce Adoption Among SMEs Remains Low

In recent times, internet marketing or e-commerce has emerged as a significant marketing tool across the globe. Web services have emerged as a cost-effective medium for marketing products from the supplier's perspective, while providing real-time information to a very wide consumer base.

According to Sanjay Nagi, Principal Consultant, Market Insight Consultants, "E-commerce is a cost-effective medium to market products, which along with product marketing and information dissemination also offers secured online sales transaction on real-time basis."

The present scenario

Although, this marketing model has become extremely popular with large corporate houses, the SMEs in India are yet to adopt it. "SMEs generally implement traditional business models and have short-term business plans. Due to this, these players have lagged behind in adopting this new-age marketing medium. Moreover, the lack of awareness among the SME sector has added to their reluctance to switch over to the electronic medium for conducting their sales activities", opined Mr Nagi.

In order to overcome this stumbling block, it is imperative that the government organises campaigns and informative workshops to spread awareness about e-commerce and its benefits. It would also help if the government introduces special incentive schemes through chambers such as Federation of Indian Micro and Small & Medium Enterprises (FISME) to promote the adoption of e-marketing tools by SMEs.

Apart from lack of awareness and business insecurity, credibility of service providers is another factor that has contributed towards the cynical attitude of SME entrepreneurs from venturing online. Thus, creating an interactive and user-friendly website with a fully secured and integrated transaction interface could not only convince SMEs, but also boost online transactions.

"Developing a successful e-commerce website entails providing equal emphasis to factors such as user-friendliness, interactivity, transaction security and product range. Making an online purchase also depends on the brand showcased, the deal offered and the credibility of the website," informed Dinesh Agarwal, Founder & CEO of Indiamart.

With global trade collapsing due to the ongoing financial turmoil, it has become imperative for industry players, particularly the cash-strapped SMEs, to leverage their business by adopting the Internet.

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David Parks is a well known author and has written articles on SME finance Guide, B2B Portal, Jewellery Manufacturers, suppliers, Manufactures and many other subjects.