Micro, Small, and Medium Enterprises (MSMEs) are the lifeblood of the Indian economy. A new study by Borzo, a global intra-city delivery service, sheds light on the operational dynamics of these dynamic businesses and the evolving landscape they navigate. The study highlights:

• Since last year, 56 per cent MSMEs have experienced a business growth of 20-30 per cent, debugging slowdown debate.

• Average shipment value of MSMEs is Rs 1.4 million per month

• Customer acquisition, recruitment, packaging and inventory management are the biggest pain points faced by MSMEs

Entrepreneurial spirit at the helm

The survey reveals a strong entrepreneurial spirit within MSMEs, with nearly three-fourths (74 per cent) being owner-driven. This reflects the dedication and risk-taking appetite of individuals who are the driving force behind these businesses. However, MSMEs face a multitude of challenges. Customer acquisition (16 per cent) and recruitment (13 per cent) top the list, highlighting the need for innovative marketing strategies and talent acquisition practices. Additionally, concerns around financing (5 per cent), packaging (12 per cent), and inventory management (11 per cent) pose significant operational hurdles. Borzo's initiative, Borzo Connect, a large-scale MSME conference, aims to address these concerns by connecting entrepreneurs and offering solutions.

A thriving ecosystem

The survey underscores the dominance of intra-city deliveries, with nearly half of MSMEs reporting over 70 per cent of their orders staying within the same city. Major metros like Mumbai, Delhi, and Bangalore are key hubs, with Tier II and II cities like Vadodara and Nagpur emerging as potential growth markets. Interestingly, the product categories are diverse, with food & beverages leading the way (23.1 per cent), followed by apparel & fashion (13.6 per cent). A significant portion (31.5 per cent) operates through both retail and online channels, showcasing a multi-channel approach that caters to a wider customer base.

While the debate on quick commerce with 10-minute deliveries rages on, the study reveals a preference for speed with a quality focus. A majority (59 per cent) of MSMEs prioritize delivery within 60 minutes, underlining the importance of meeting customer expectations and ensuring timely deliveries. Additionally, 72 per cent value both speed and quality for a seamless customer experience. This highlights the understanding that speed alone doesn't guarantee customer satisfaction.

Financial performance and growth indicators

The average monthly shipment value for MSMEs is approximately Rs 1.4 million. Notably, over 95 per cent of MSMEs reported an increase in shipment value compared to last year, with a majority (56 per cent) experiencing a growth of 20-30 per cent. This indicates a positive trend and potential for further expansion. Interestingly, only 21.4 per cent of MSMEs reported a business slowdown, suggesting the sector's resilience despite broader economic concerns.

Sustainability and embracing technology

The survey highlights a positive shift towards environmental responsibility. A staggering 66.6 per cent of MSMEs have adopted sustainable packaging materials like bagasse boxes and cloth bags. This growing focus on eco-friendly practices reflects a responsible business approach. Moreover, a high adoption rate (85 per cent) of supply chain automation suggests that MSMEs are embracing technology to enhance efficiency and scalability in their operations.

Collaboration and support for continued growth

The Borzo reveals a dynamic MSME sector in India. While challenges persist, these entrepreneurial businesses are demonstrating a willingness to adapt and innovate. By addressing pain points like customer acquisition and financing, fostering collaboration through initiatives like Borzo Connect, and promoting sustainable practices, stakeholders can empower MSMEs to thrive. Also, robust logistics assistance, catering to the diverse delivery needs of MSMEs across various cities, will further boost their expansion.

Thus, India's MSMEs are a powerful engine of growth and innovation. By recognizing their challenges and providing the necessary support, stakeholders can ensure that these businesses continue to be the backbone of the Indian economy. Entrepreneurial spirit, willingness to adapt, growing focus on technology and sustainability position MSMEs towards a bright future, propelling India's economic journey forward.