E-commerce sellers witnessed an increase in revenue by 194%: TISS Report

Tata Institute of Social Sciences (TISS), Mumbai, shared findings of a recently launched research report titled, “Does e-commerce impact small enterprises and employment in India?” which aims to assess the impact of e-commerce on small enterprises, self-employed people, and wage labour, as well as its ability to foster both domestic business and exports. 

COVID-19 has encouraged businesses to adopt digital platforms, contributing significantly to business expansion, market coverage, labour productivity, and workplace modification. During this time, 40% enterprises in India digitized their business. TISS conducted in-depth interviews, multi-stage sampling, and an all-India sample survey of 361 SMEs across 4 regions and 16 cities with an objective to gauge the impact of digitalization on value creation and employment. Some of the key findings include:

Impact on jobs

• Businesses that have adopted digital technologies have witnessed 40% more employment than those who did not.
• 15% SMEs have hired new employees through their e-commerce participation.
• Digitized SMEs provide 33% more jobs than non-digitized enterprises with 67% jobs in T1 cities.
• The labour productivity in digitized firms is 133% higher than that of non-digitized enterprises, with 68% higher in tier-1 cities and 157% higher in tier-2 cities than their counterparts.
• E-commerce platforms have increased women’s employment, especially in the self-employed category (59%) and women business owners (nearly 91%).

Impact on business and revenue

• Digitized SMEs increased their sales by 42% and 40% in T1 and T2 cities respectively.
• E-commerce users have recorded a 1.5 times higher value addition with online businesses enjoying 194% revenue than their counterparts.
• The costs involved in running a non-digitized business is 25% higher in tier-1 cities and  42% higher in tier-2 cities than the digitized business.
• Digitized firms enjoy 178% higher median revenue in T2 cities than non-digitized enterprises.
• 23% of SMEs improved their intra-state reach and 16% improved their inter-state reach.

There exists a substantial difference between enterprises that use e-commerce and non-users in terms of value creation, employment, productivity, exports and women in employment. For a structural change, there is a pressing need for integrating digital inclusion and its adoption for diverse entrepreneurial pursuits.