Anushruti Singh
In July 2021, the MSME ministry designated retail and wholesale trade as MSMEs, granting them priority sector lending under RBI guidelines. This occurred during a period of severe liquidity constraint for the retail and trader communities. Simultaneously, traditional retailers embraced technology to transform their businesses while also maintaining their resilience.
Despite their enormous potential and growth, problems continue to impede the ease of doing business for them. As a result, the India SME Forum, in collaboration with Indian policymakers, has launched FIRST, the Forum for Internet Retailers, Sellers, and Traders. The platform aims to work to create a conducive policy and ecosystem that will help remove the most significant barriers to online merchants’ national and cross-border expansion.
Vinod Kumar, President, India SME Forum (ISF), in conversation with SME Futures, talks about the reason for why the Indian SME Forum has launched this platform and the intent behind it.
Edited excerpts from the verbatim conversation
What is the main intent behind the launch of the FIRST India forum?
Over the last few years, industry stakeholders have been observing two trends. Number one, the retailers and traders at the ground level are not getting the attention of the government. Number two, their challenges are still unresolved and there are certain key issues which are being actually side-stepped by people.
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But on the other hand, what I feel is that each of these retailers or traders or even internet sellers have the capability to grow very big. They have the capability to sustain their businesses but none of them are being offered the right tools, the right solutions, and the right mechanisms for doing that.
And that is why the India SME Forum felt that it was important to bring all the trade associations of India on to one platform, especially those which dealt with the unorganised sector. The organised sector has a lot of representation. Here, we are only talking about the unorganised sector, which we want to bring on one platform so that we can jointly arm each one of them with the right tools and the right pathways to go forward with the state governments, which have a considerable hold on state policy, and also with the central government, which makes a lot of laws specifically for this sector.
Similarly, when it comes to the government, they also listen to very large organisations like FICCI, CII or ASSOCHAM. But the question is, how many of the small retailers or traders are the members of these bodies? See, you have associations which have a membership of just 2,500 and they dictate the entire policy for trade and industry to the whole country.
This scenario cannot go on. It cannot be that our voices continue to get ignored. And one thing that the government has been working on is getting all the MSMEs together, including the ones in retail.
It is good that the government has brought they (retailers and traders) under the ambit of the MSME definition. Now the next question is, what is it that the government can do to empower them? We will bring all of them (govt, retailers and traders) together on the same page so that their expectations from each other are very clear and the things that can be done in the short term and in the long term can be worked on.
So, what are the main challenges that you will be highlighting through the FIRST forum?
If you look at the biggest challenge that most retailers face today, it is the change in consumer orientation. After the pandemic, consumers have started acting very weird when it comes to a normal mom and pop store.
Now the consumer says that they want to return the product tomorrow and you should pay them back. They demand for a warranty on almost everything. Not even caring from where the retailers or the traders bought the item from, whether it’s from China, Thailand or wherever, they want a warranty on it. Or they ask for extra services on the entire thing. So, with the changing consumer behaviour, the business models of retail will need to be tweaked. This needs to be done when you are talking about offering all of these services because you must be aware that we have a model of MRP, which is the maximum retail price.
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But most people feel like it should be the minimum retail price. However, consumers feel that they should get the BRP, which is best retail price.
Therefore, I would say that there are three different parties on three different terms when it comes to the business model. So, what we are trying to do is to educate the retailers wherever we can, in whatever that they are lacking. And at the same time, we are also making the government aware of the issues which can be resolved quite easily, which don’t need to continue. However, most people are not discussing those issues. Rather, they are referring to the deviations from the normal things that we need to do to achieve the larger goal.
If we talk about e-commerce, how is this forum going to aid in supporting the retailer or the trader community to adopt e-commerce?
E-commerce is a very simplistic term. But what we feel is that every retailer needs to know his customer. They should be able to reach out to the customer at any point in time, and at the same time be able to provide them with full list warranties. And after sales services or whatever else is required, and they should be available for any customer, not just within a 100-metre or 500 metre or one kilometre area, but throughout the country. Not only throughout the country, but throughout the world.
On one hand, we talk about e-commerce killing a lot of businesses. And on the other hand, India has retail chains like Vijay Sales, which has multiple shops and better pricing than Amazon and Flipkart put together. It has better after sales service as well. So, it is the perfect example of a small business making it big. In fact, they are also ahead in e-commerce. They are using all the right solutions, be it for their customer care, their supply chain or for their CRM. And that is the reason for their enormous success.
So just getting on an e-commerce platform or not is not the issue. The issue is to elevate the status of each retailer to a point where they can have 50 shops each. Because if they know the processes and the systems in one shop, the only thing that they need to do is to create a process and replicate it again and again.
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And that’s what we are trying to do.
So how many people have registered till now, through all the associations that have joined?
Currently, as far as I know, there is an overall membership of 27,800 odd retailers and traders. But that’s not the number that we are looking at. It’s much bigger than this. We are looking at five lakh plus members. So, this entire initiative will continue until we get to that number. At the same time, we also want to cover the length and the breadth of the country to expand. When you look at the laws, or when you look at the central laws, they don’t apply only to one region, they apply to the whole country.
So even if we request the government to put something (a platform) in place, we have to ensure that the platform is applicable in the north as well as in the south, and in the east as well as the west, not just in one place. Some people are saying that we need X-Y-Z. So due to that, our aim is to reach out to every corner of the country and have a sizable number of people that we can then work with.
