EDITION VII

COLLABORATE TO INNOVATE

Team Name: JokaBizWiz

Team Members: Tanvi Agarwal | Arushi Chaplot | Vishnu Anil

“My 2020 Vision for India is to transform it into a developed nation.

That cannot be abstract; it is a lifeline.”

~ A.P.J. Abdul Kalam

Technology

Penetration

Government

Policy

• 32% MSME have a website for product display

• Over 60% in MSME have access to internet

• In China and US, 500mn.

surf the internet each day

for deals

• $52bn global market

opportunity in jewelry,

leather goods, handlooms,

handicrafts

• Cross border online retail is

predicted to grow at twice

the rate as domestic online

retail

Marketing

43% of India’s exports

limited to Asia

63Mn SME contribute

to 28.77% GDP, 40%

of exports of the

country.

Employ 117mn

people, produce

over 6000 products

B2C cross border trade from

India estimated to reach 2bn$

in 2020 from 500Mn$ in 2016

US $26 bn India’s offline

export achieved from one

of the leading ecommerce

market place

6,000 micro-clusters

and 1,157 industrial

clusters

Industry Overview

• Support and Outreach target 78 MSME clusters

• Loan of under 1Cr, in <59 Minutes, 2% Interest, rebate

• Govt to invest Rs. 6000Cr. for tech training

• Increased revenues, improved market reach, Cost

saving in marketing and communication

• Easier customer acquisition and experience.

Major Export Partners

Thailand, Singapore,

Philippines, Malaysia North

America, Europe (France, Italy,

Germany, UK), Australia

Global Online trade over

$1.5tn

Facts Opportunity Drivers of Change

Number of digital buyers

worldwide (bn)

E-Commerce – Dominant channel in most

categories

Internet user manpower

Preparedness percentage

Reengineer ICEGATE Infrastructure- Direct port delivery

2. Modify SWIFT Centralized Clearing Model

Classify the goods as private goods or low priced goods to group

goods. Allow electronic transmission of documents across various

stakeholders. Connect banks to a single window to allow automated

transfer of money

MSME Product and Website

Correct Data transmission gaps with GSTN

Expand Free Trade and Warehousing Zones for 3-4 years

1. Current Issues

Require better control on user wait times, call drop rates, call

resolution

3. Structured Help Desk

1.Product standardization

Similar quality products and compliance with country laws

2.Website template standardization and localization

Reduce platform switching costs. Showcase importing country

specific rule, instructions on cost & shipping timeframe clearly

3. Government tie-ups with Amazon, E-Bay

4. Exchange Rate System

Link to trading system, Develop cross-border risk control fund

and contingency fund

Challenges

High cost of flow of

materials

Manual Customs

Procedure

Poor quality of

products

Customers prefer

local customization

Exchange rate

fluctuations

Recommendations

Infrastructure

Order Dispatch Cross-Border Sale After Sales

Customized local language

required

Reduce Shipping Costs

Cumbersome customs

Unreliable, lengthy transit time

Non transparency in delivery

Complex and Ambiguous

Return Processes

Logistics

• Development of website, e-

commerce platforms etc.

• Ensure inter-operability of

transaction information

across platforms for

standardized information.

• Multi-channel fulfillment by

e-commerce platforms such

as Amazon allows omni-

channel development

• Centralized European local

centers

• Product can be kept in local

fulfillment centers of E-

Commerce platforms.

• Reduce transit time; paper

work

• Low Customs & Shipping

cost:- ocean or air freight

partners

• Cooperative platforms & link

postal networks in fully

connected networks

• Outsource customs for

MSME to delivery providers

and ecommerce platforms

• Engage a solid partner in

targeted region, local

business customs, consumer

preferences and cultural

differences

• Develop strong

partnership with

neighboring countries

• Allow altering of Delivery

Times and Locations.

• Keep warehouse &

delivery at destination

• Return to the nearest

fulfillment center and issue

refund

• Expand time for free

customs duty on imports of

returned goods

• Dealing with damaged

goods

Omni-channel Sales Multi-country inventory Return logistics Local Partner

Policy

Treating Ecommerce exports at par

with low value exports Ecommerce exports are realized as OPGSPs and low

value exports as bank transfers. Facilitating

ecommerce export transactions to be recognized

as exports & calculated under exports in GDP

calculation

Project-based targets Capitalize on benefits of target customer base

by forming export oriented clusters &

project based targets in select categories

like textile, apparel, leather, handicraft, gems

& jewelery

IP Provision for returned goods Clarity of customs for return of goods- Section

74 of custom rule does not treat returned

goods within 2 years of date of shipping bill as

imports; practical implementation needs to be

strengthened to promote B2C exports

Raise the Deminimus threshold Revise existing limit of INR 25000 to INR

2-3 lakhs to facilitate ecommerce

companies to use courier mode for high

value shipments

New procedures in MEIS policy Application similar to paypal could be developed. This

would eliminate increased transaction time for claiming

MEIS benefit (approaching FIRC then OPGSP). This can

be done by treating transaction ID of OPGSP at par with

e-BRC. This solves increased transaction cost problem

for low value consignments (advance payments of INR150-

200 for each FIRC

Uniform Guidelines Requirement of NOC should be relaxed. Fixed

timelines should be mandatory

Enhancing Export Competitiveness Provisions for commercial shipment in CN-22

form to be included. Support for small value single

item shipment in the current courier shipping bill

and focusing on Made in India products to enhance

export competitiveness

Policy

Reforms

37 EPCs in different

sectors across India

Export Remittance

by OPGSP-

USD500-USD10000

Lack of awareness

on benefits of

technology

Cost: of hardware

items is high and

recurring

Poor physical

infrastructure

Lack of skilled

manpower

Privacy and Security

concerns

Low accessibility to

finance

Wrong Perception

Issues

Barriers to

Technology

Adoption

• Cloud based technology to be adopted.

• B2C marketplaces- MSMEshopping.com launched by NSIC

• Enabling a consultative approach through periodic interactions with

different stakeholders, trade bodies and industry associations such as

Confederation of Indian Industry (CII)

Technology

Technology Centre

Framework

Interoperability issues

Adequate infrastructure for e-payment

• Missing links between third party e-payment service providers &

local banks

• Establishing enabling regulatory frameworks can address this

• Banks & non-bank providers would compete and establish

partnerships to offer innovative services

• For a functional e-payment system, providers need to

(a)Recognize the identity of their users; (b)Comply with standards;

(c)Offer uninterrupted and reliable services

• Telecommunication & banking networks, electricity & ID systems

in place

Payment Issues

Different Payment Methods

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Digital & Offline Advertising

Targeted Products

Marketing Initiatives(1/2) Recommendation 1 – No one size fits all. Ensure Localization.

B2C exports – Country wise

Export Countries

• Each country has specific preferences for each product. – expose

MSME to their requirements

• Handicrafts and Agricultural products on their own online exclusive

distribution centers

• Government should tie up with local authorities to enable

knowledge transfer in India

• Local Language use for advertising and product description

• Generate website traffic, Use analytics to judge customer interest

• Social media contests and blogs

• Advertising at airports and aircraft magazines as most are aircraft

flyers

Unlucky No 4 Number 4 considered unlucky in China & Japan. No

product should include that.

Finicky Europeans High number of aged people worry about fraud. Focus on

transparency and safety.

.

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Reading reviews is #1

behavior before

making purchases

53% consumers

expect to earn 1 out of

4 online purchase

Bulk of online returns

is due to item not

matching description

Promote Traditional

industry as eco friendly

– Khadi,, coir, made

using natural colors

Specialized promotions

for each product and

major countries

Tie up with Amazon

and ecommerce

platforms and

corporate houses

(CSR)

Set up fairs and

exhibitions in foreign

countries and marts

Marketing Initiatives(2/2)

Key Initiatives

Insights

• Detailed reviews, product descriptions,

imagery and sizing guidelines

• Relevant local information and adapt web

site’s interface to local customs

Website / App / E-commerce

• Select the right markets for an online expansion, the target countries should be

profiled in order to determine their potential.

• Sellers should include an analysis of the search frequencies of the products

they wish to sell in the new markets.

• Compare product prices, CPC (Cost per Click, average costs when running an

AdWords Campaign) ,CPO (Cost per Order)

Analytics

Recommendation 2- Omni channel service strategy

Educate MSME to leverage Global Opportunities(1/2)

Niryat Bandhu

Industree

Foundation,

Mandya district,

Karnataka

Trade Receivables Electronic

Discounting System (TReDS)

platform Interaction between MSMEs &

corporates registered on the platform

Business portal: for services like

industrial license, company affairs, PAN

& CBDT services, import-export code.

Example: www.ebiz.gov.in

Zero defect zero effect scheme (ZED

scheme): Improve quality and scale up

MSME business

Three major Government incentives:

Towns of Export

Excellence

• Platforms providing Export Import Certifications

make MSME study formalized and professional

• Makes it easier to access finance and credit

• Producer companies providing hard & soft skill

training to create self motivated individuals

• Government funding + technology platform to

create micro entrepreneurship. Ex- Handicrafts

• Collective townships producing goods of INR

750 crore or more

• More potential for growth at TEE

Current Offering

Examples

• Mobile Apps and

Platforms

• Foundation

Support

• Privileges

New

Opportunities

Development of Data Bank

• MSMEs of BRICS countries to access relevant data for CBT,

investment regulations, investor contacts, venture funding,

legal, taxation and logistic help & procedures

• Stakeholders would exchange information for business

development, technology transfer, funding options, exploring

joint ventures & investment opportunities

Technology Platform

Industry Alliance

Consultancy Program

• Drafting a model code for ecommerce enabling legal, fiscal & operational

matters to bring uniformity & simplicity resulting in scalability of operations of

participants

• Scoring databases using consultative approach from different stakeholder

participant in cluster education program to be encouraged for free flow of

information

• Targeted capacity building programs through multi-dimensional gateway to expand MSMEs operations

through global internet platforms incorporating customs facilitation

• Developing rules on transparency to provide information to sell online like-certification, licensing,

registration & standard requirements

Educate MSME to leverage Global Opportunities(2/2)

• Allowing Indian MSMEs to get expert international trade

advice & support through a free meeting with platform

ecommerce advisers like DIT

• This will help develop & implement an international

ecommerce strategy; set up e-marketplaces & identify new

e-marketplaces around the world to sell through with the

platform help. Selling online overseas tool could be

developed

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Financials Fulfillment by E-commerce Self Fulfillment

Activity

Monthly Monthly Monthly Monthly

Standard - size Oversize Standard - size Oversize

E-commerce Tie-ups

Small (1lb or less) $2.41 $8.13 $2.41 $8.13

Large (1lb or less) $3.19 $9.44 $3.19 $9.44

Large (1lb to 2lb.) $4.71 $73.18 $4.71 $73.18

Large (over 2lb.) $4.71 $137.32 $4.71 $137.32

E-commerce Tie-ups

For a $10 item +shipping charges - referral fees

Fulfillment by E-Commerce $3.90 $3.90 $7.20 $7.20 Cloud

infrastructure cost Host information on cloud infrastructure $3.00 $3.00 $3.00 $3.00

Total

Small (1lb or less) $2.41 $8.13 $12.61 $18.33

Large (1lb or less) $3.19 $9.44 $13.39 $19.64

Large (1lb to 2lb.) $4.71 $73.18 $14.91 $83.38

Large (over 2lb.) $4.71 $137.32 $14.91 $147.52

Yearly Total Yearly average charge $1,370.58 $20,811.39 $5,093.58 $24,534.39

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Thank you

Tanvi Agarwal Goldman Sachs

(Investment Banking)

Vishnu Anil Avendus

(Investment Banking)

Arushi Chaplot J P Morgan & Chase

(Markets)

Team Details: