The pandemic has impacted not only the physical and mental well-being of populations but has adversely affected the economic health of economies. Organizations have realised that a digital-first culture must be embedded into a business’ DNA as consumers change the way they shopped, and this trend is expected to continue.
Growing digital connectivity clubbed with the rise of online shopping gave rise to borderless economies. For instance, a woman based in London looking for customized traditional Indian wear can just go online to buy what she wants. She may find exactly what she needs from a seller in Jaipur. Digital and e-commerce have expanded the opportunity for merchants and made the world a global market for consumers.
The opportunity for MSMEs and freelancers
Micro, small, and medium enterprises (MSME) and freelancer communities have been impacted the most by the pandemic. Small businesses that have been growth drivers for several economies are now striving to keep their businesses alive.
Although some countries are now on the path to recovery, countries such as India are now dealing with the second wave of the infection and continue to apply necessary preventive restrictions and lockdowns that also unfortunately impair business prospects.
MSMEs are displaying resiliency and are strengthening existing business portfolios by adopting digital and focusing on enhancing customer experiences. Some economies are showing green shoots of recovery which will have an impact on international demand and hence is an opportunity that local businesses need to cater to. PayPal’s Cross Border Trade (CBT) Report 2021 reveals that exports represent a US$526 billion opportunity for Indian businesses, of which goods account for 60%, while services for 40%.
Taking Indian goods to the world
Made in India goods account for $314 billion in exports. By leveraging this, the MSME sector can only support employment but also earn valuable foreign exchange for the country. According to the report, demand is significantly high in the following sectors:
- Gems & Jewelry ($34 billion)
- Ready-Made Garments ($16 billion)
- Leather Products ($5 billion)
- Electronics ($3 billion)
- Handicrafts ($2 billion)
The growing opportunity for Indian services exports
India's service industry is its strength. As one of the world’s largest freelancer markets, the surge in demand for digital services has been significant and in high double digits annually. The growing number of women entrepreneurs makes this opportunity an extremely lucrative one. For instance, home makers with a passion or relevant training in fields such as Indian classical dance or yoga are finding it relatively easier to teach global audiences from the comfort of their homes.
As per PayPal’s CBT Report, the current services export market opportunity stands at $213 billion. Demand for services such as software, travel, consultancy, engineering, and advertising are the highest, so naturally small businesses that operate in this space, optimizing their offerings for global consumers will see faster recovery from the impact of COVID-19.
PayPal’s Cross Border Trade (CBT) report delineates the opportunity exports presents to MSMEs and freelancers. Through a 5-part series on PayPal’s CBT report, we will call out key sectors and corridors that small businesses should target to ensure that they maximize resource allocation and returns. PayPal has been enabling CBT for over a decade in India and has unmatched scale to help small businesses reach our 377 million global consumer base across 200 markets.