Amazon Launches ‘Digital Kendra’ to Onboard MSMEs on E-Commerce Marketplace

Amazon had committed to digitizing 10 million micro, small- and medium-scale enterprises by 2025. The newly-launched Amazon Digital Kendras will be the physical centers that will provide information to MSMEs regarding the advantages of e-commerce. They will also help businesses efficiently employ third-party services. These would include assistance in cataloging, taxation and GST support, digital marketing, shipment, and logistics to begin their digital journey.

Amazon’s effort to bring more sellers to the online platform

In 2013, when Amazon began its operations, e-commerce was quite an uncommon phenomenon. People purchased certain products online, but only occasionally. For almost every purchase, they had to pay shipping charges too. The sellers who had newly opted for the digital platform were not competent and confident enough to go digital entirely.

Customers were still unfamiliar with online payments as cash was still the majorly preferred mode of payment. Even those familiar with the concept of online payments were not confident about its mechanism and were reluctant to switch to digital payment modes.

All these reasons made Amazon focus on pushing sellers to reach out to customers within India and at a global level. It invested a huge amount in technology, logistics, payment digitization, and infrastructure for delivery. These encouraged smaller businesses to finally migrate to the online platform by availing of small business loans.

Investments made for digitizing MSMEs through Amazon Kendra

An investment of over Rs. 7000 crore had been announced by Jeff Bezos, former Amazon CEO, in India for helping the small- and medium-scale businesses to come online. He also committed to export Indian-made goods worth USD 10 billion by 2025.

The plan for this investment was to use it to digitize 10 million MSMEs, traders, manufacturers, resellers, local brands, and shops. These efforts resulted in the establishment of 100 digital centers across India, the first of which was launched in Surat. Such Digital Kendras offer a one-stop destination to the MSMEs for kickstarting their journey of digital entrepreneurship. Since Gujarat is the powerhouse for various industries like jewelry, gems, textiles, ceramics, auto parts, and others, it forms the MSME hub in the country. Thus, the Amazon Digital Kendra in this location would cater to the needs of numerous MSMEs in and around.

There are over 1.5 million cubic meters of storage space in the three fulfillment centers of Amazon. Besides this, it has a powerful delivery network with over 100 stations and numerous delivery service partners. All this has facilitated over 1 lakh sellers in Gujarat to sell their products in various parts of the country, and even to other countries. The artisans, weavers, and local stores get a significant boost in their business through this.

How will this benefit MSMEs?

Amazon’s initiative will play a major role in imparting the right knowledge and skills to enhance the business of MSMEs across Gujarat and increase the adoption of e-commerce quickly by creating awareness. In the current scenario when small-scale businesses are badly hit, this step would act as a healing factor to revive them and help the entrepreneurs rebuild their businesses. Collectively, this will improve India’s economy.

As per the Vice-President of Amazon India, Manish Tiwary, recent years have witnessed a growth in the interest of sellers in getting onto the online platform. Thus, Amazon’s Digital Kendras are of great help for those striving to be a part of the global selling program of Amazon.

The inclination of sellers and customers towards the online platform has been massively triggered by the current pandemic, which forced people to stay at home. Even though customers have a better experience with local shops, they avoided purchasing from physical stores and opted for home delivery through online shopping. When local shops were unable to get enough business in this situation, they had to switch to an online mode of selling. This benefited both the sellers and buyers, in being able to conduct business and purchase everything from the comfort and safety of their homes.

Seeing their peers going online and its benefits, other small- and medium-scale businesses began to follow suit. For some, it is still a work in progress. In the whole process, Digital Kendras would simplify everything, making digitization simpler than ever.

Statistics show that nearly 3 lakh new sellers have joined Amazon since January 2020. This shows how, despite everything, the pandemic positively affected digitization in the country. The rollout of the Digital Kendras had not been too progressive with the onset of the pandemic. However, with the situation gradually improving, it was started at Surat. Amazon Easy, a brick-and-mortar setup, had also been established for customers some years ago to help them shop online.

With Amazon Digital Kendras, awareness among clients can be increased. This will enhance their understanding of online business. The Digital Kendras will also assist them with tools that can help them grow. Sellers can avail the onboarding services from the centers to get themselves registered with Amazon, besides engaging in other programs such as Amazon Global Selling, Amazon Saheli, Amazon ‘I Have Space’, Amazon Pay, Amazon Karigar, and others.

Benefits of availing business loans for e-commerce

The latest technologies have triggered the growth of smartphones, tablets, and other gadgets that have boosted the e-commerce business. With people’s increased access, more sellers are inclined to start their business online to reap the maximum benefits.

But to start an e-commerce business, sellers will need to arrange funds and business loans. Just like an online business, this has also become easier as a seller doesn’t have to undergo a complex documentation process. The business loan interest rates are applicable as per the seller’s needs, and the process can be quickly completed online. Based on the type of business, they can avail a good amount of funds for the procurement of goods, by securing a business loan online.

When the seller has acquired enough knowledge about the ease and importance of switching to an online platform, they can immediately apply for e-commerce business loans.

Here are a few reasons to opt for such business loans:

• Easy process of getting funds
• Collaterals are not always mandatory from the sellers
• There is no restriction regarding physical positioning
• Lower interest rate compared to other types of loans

Eligibility criteria for getting a business loan for e-commerce

The eligibility conditions are similar to the documents required for term loans followed by conventional banks. Here are the basic documents that the seller needs to furnish:

• Credit report showing the credit score
• Previous sales and purchases
• Individual’s financial statement
• Statement mentioning the reason for the business loan for e-commerce
• Loan tenure

Benefits of availing MSME business loans

Just like business loans for e-commerce, MSMEs need loans to fulfill additional fund requirements for their business and scale up their operations. The fund can be used for purchasing raw materials, inventory, upgrading to advanced technology, and better cash flow.

Even when MSMEs opt to switch to online platforms, they might still maintain their brick-and-mortar shops, which would need funding for profitability.

Eligibility criteria for getting an MSME business Loan

These are the general eligibility requirements for availing of an MSME business loan:

• A person has to be a seller, manufacturer, trader, retailer, or proprietor, with the business being at least 3 years old.
• Their age should be between 25 and 65 years.
• Aadhar card, PAN card, voter ID, or any other government-issued ID for KYC
• Address proof in the form of a rent agreement, an electricity bill, passport, or other relevant documents
• Financial documents have to be produced. This includes ITR copy, GST returns, bank account statement, and profit loss statement.

Conclusion

Amazon’s efforts in digitizing India and helping MSMEs to flourish in their business ventures have created nearly 1 million jobs in India. Considering the period after January 2020, there have been over 3 lakh direct and indirect job recruitments.

Amazon has always been gearing up to stay ahead in the competition with players like Flipkart, Reliance Industries, Jio Mart, and others. For this, it focuses on enhancing the seller base in the marketplace. So, Amazon’s digital facility will act as a global platform for MSMEs in India.

More business owners are gradually coming forward to apply for SME business loans to get their businesses to take off. Amazon’s Digital Kendras would train, guide, and provide other necessary support so that they can easily face tough market competition. With programs like Amazon Saheli, entrepreneurs among women are being empowered to use their skills, avail special business loans for women, and take their first step as businesswomen, which steer them towards a bright future.