MSMEs – Dutch Uncles

When Should Small Businesses Consider Opting For Bundle Pricing?

Aakash Sharma — Mon, 30 Aug 2021 08:35:10 +0000

Bundle pricing, also known as product-bundle pricing, is a strategy retailers use to sell large quantities of high-quality products by offering discounts to consumers. Through bundle pricing, retailers offer many different products as part of a single package and then offer them at a lower price than the cost of buying those products individually.

This pricing method is standard among online retailers. Competitive flat rates under bundle pricing are a great way to promote more products, get noticed, and engage with the audience in an enticing way.

How does bundle pricing work?

Bundle pricing is the practice of selling a group of products as a package. The aim is to make shopping easier for the consumer and put together the related products at discounted prices.

This can be beneficial to the business as more products are sold. Small businesses are encouraged to use bundle pricing as it is a good business model for starting fresh. Bundled pricing is a great way to increase product shipments, stock-keeping units (SKUs) with low success rates and give more value to consumers.

Compatible for Small, Medium and Micro enterprises

Bundling is typical in the e-commerce and retail sectors. For this reason, newer and smaller e-commerce sites often offer product packages with cheap or discounted items.

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Bundle pricing works because 'price' is the most critical aspect for a customer while engaging in any transaction.

In a transaction where customers get bundled pricing, they feel comfortable getting a lot for less rather than paying more for individual entities. This sensation works everywhere – in the FMCG sector, clothes, crafts, telecom services, food and restaurants, and so many more.

Which Indian industries use bundle pricing?

Indian consumer goods companies are the most significant users of bundle pricing. They offer bundled prices for various products for daily use. They do this at several levels, including the B2C, B2B and D2C levels.

The value pool created by this pricing ensures that consumers and retailers get their money’s worth. Small businesses like department stores, clothing stores, thrift stores, etc., often use bundled prices to move their products and gain traction.

Pros and cons – what to do and what not to?

Bundled pricing has both advantages and disadvantages. On the one hand, this is an excellent strategy to use if the company wants to launch products faster or offer customers a higher discount. This pricing method drastically reduces marketing and selling costs. With personalized pricing and product simplification, all types of businesses can use it to accelerate transactions.

However, if poorly used, bundle pricing can do more harm than good to a brand. In some cases, bundled pricing can harm popular products when put against discounted and packaged products. There is always the risk that consumers will reject the product packaging because it does not meet their wishes. Ultimately, entrepreneurs need to develop a solid strategy to create value without compromising the company’s image.

Therefore, SMEs operating in all sectors should take a hybrid approach, applying flat rates to specific products based on customer demand and differentiating other products based on this. This allows them to experiment with the most suitable sales techniques and build a good customer base.

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India’s Toy Story: What Is Expected By 2024?

Aakash Sharma — Sat, 28 Aug 2021 03:35:10 +0000

Amidst an emerging wave of self-reliance, Indian industries are moving steadily towards acquiring self-reliant tactics and contributing to the ‘Aatmanirbhar Bharat’ mission. One industry that is trying its best to hone self-reliant skills is the Indian toy industry.

Many developments have taken place that have started the sector on a path to become a global centre for toy production. These efforts are slow but will indeed contribute to an ‘Aatmanirbhar Bharat’.

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Upscaling the Indian recyclable toys sector, the government and other industry stakeholders are re-building the industry, focusing on eco-friendly and natural materials.

This is aimed at pushing for recyclable materials and minimising the use of plastic in toys. Some Indian toy start-ups have started on this idea and are proudly donning the Made in India products tag.

Desi Toys

Desi Toys is a Mumbai-based toy company that creates toys with wood, fabric or metal, focusing on materials that are more durable than plastic. With specific toy products such as Gulel, Lagori, and Gilli Danda, Desi Toys has already partnered with retail toys giants like The Bargain Book Store, The Bombay Store, and Hamley’s to meet the growing needs of customers.

Ariro Wooden Toys

Established in 2020 and based in Chennai, Ariro Wooden Toys produces high-quality wooden toys made of Neem wood. The company has completed more than 10,000 orders in one year, reaching Rs 2.5 crore in annual revenue.

B2B model for others to follow in the toy industry

Selling toys with different products using the B2B model is an effective way for Indian toy-makers to grow their business. It could also help them compete with the Chinese monopoly in the traditional toys market.

The B2B model is suitable for bulk ordering of specific orders of toys. Therefore, manufacturers can quickly achieve scalability by making these particular toys and taking up more orders. In a B2B business, building relationships can create long-term value. Therefore, building a long-term relationship with bulk B2B buyers can ensure stable returns in the future.

Indian toy industry insights

The Indian toy industry is set to witness a shift in business-doing under the new B2B model and attract the attention of domestic and international markets. The size of the Indian toy market reached $1.23 billion in 2020, and the market is expected to grow at a compound annual growth rate of 12.2% from 2021 to 2024.

India’s toy industry’s global market share is 0.5%. Indian toy-makers are mainly found in the National Capital Region (NCR), Maharashtra, Karnataka, and Tamil Nadu, among other states. The industry is fragmented: 90% of the market is disorganised, and there are 4,000 toy companies in the SME sector.

How can new and small businesses succeed?

The current toy industry in India is about $1.5 billion. The sector remains severely undetected and untouched from the formal economy. It is essential to understand the industry’s potential and not to anticipate its unexplored potential in a negative light. On the contrary, this less explored sector offers enormous growth and success opportunities for new entrepreneurs and budding SMEs.

The government has approved 100% FDI in the toys industry to help local businesses and toy manufacturers secure funds. It can help companies raise capital to grow their business. With an annual export value of $130 million (2019-2020), Indian toy makers already have a primary network of global consumers. It can be increased by working in the above places.

In addition, Indian players possess the technical knowledge of precision equipment and can quickly develop the ability to deal with the shortcomings of models and structures. All these factors together will have a substantial positive impact on the Indian toy industry, and SMEs will be the main driving force of the industry in the future.

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Facebook’s Small Business Loans Initiative For India

Aakash Sharma — Sat, 21 Aug 2021 03:35:08 +0000

Facebook India has launched a new programme called ‘Small Business Loans Initiative’, which partners with Indifi online lending platform to promote small and medium-sized businesses (SMBs) on Facebook through independent lending partners. It is a pivotal move to help small businesses get credit quickly.

India is the first country where Facebook has launched the programme. It is open to companies registered in 200 cities and towns in India.

What is Facebook’s Small Business Loans Initiative?

Facebook’s Small Business Loans Initiative aims to give small businesses access to business loans and narrow the credit gap in the Indian SME sector. This programme allows SMEs to obtain loans between Rs. 5 to Rs. 50 lakh in 200 cities across India.

Getting a loan on time is especially difficult for small businesses that are just starting or have a bad credit history. Facebook’s strategic partnership with Indifi is critical in resolving that hurdle. Indifi is a major digital lending platform for providing business loans to Indian SMEs and Facebook’s partner in providing loans to small businesses. The initiative is set up with the potential to draw more partners.

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Facebook's Small Business Loans Initiative allows small businesses to apply for a loan through a direct online application and without collateral.

The move comes months after the government introduced new social media and OTT laws for all tech companies operating in India. With this, Facebook has shown its commitment to creating financial opportunities for Indian enterprises.

SMEs and SMBs working on using Facebook as a business platform

As per a survey done last year by Facebook in collaboration with the Organization for Economic Co-operation and Development (OECD) and the World Bank, in 2020, almost one-third of small and medium-sized businesses operating on Facebook cited cash flow as their most significant problem in working. The small business loans initiative is designed with these figures in view.

India has 1.5 million (15 lakh) SMB Facebook pages, and such businesses on Facebook have grown more than 70% year over year. Through Facebook’s collaboration with Indifi, small businesses that promote with Facebook can get credit loans at a predetermined interest rates of 17-20 per cent annually.

Government support

Facebook’s Small Business Loans Initiative was featured in the “Enabling MSME Growth through Financial Inclusion” online event hosted together by Facebook India and the Federation of Indian Chambers of Commerce and Industry (FICCI).

FICCI praised Facebook’s efforts to provide small, medium and micro businesses with the right opportunities, skills and solutions. The commerce body supports closer partnerships with the private sector to develop Indian MSMEs. It backs companies like Facebook that are helping small businesses and making it easier for them to get credit access.

How can businesses get benefits from this initiative?

Indifi will not charge small businesses enrolling in Facebook’s Small Business Loans Initiative a processing fee. Indifi will make the funds available within five business days of receiving the small business application and all completed paperwork.

Many small businesses find it challenging to get low-budget loans because they cannot convince lenders of their repaying credibility and business mettle. But small businesses can get loans between Rs. 5 lakh and Rs. 50 lakh through this programme. Small companies, wholly or partly owned by women, can also get a 0.2% discount on Indifi lending rates.

Moreover, Facebook will not be monetising this partnership and will help connect small businesses with Indifi. At this point, companies seeking aid do not need to advertise on Facebook, thus making the assistance smoothly available. This is undoubtedly a promising phenomenon for small and medium-sized enterprises and new entrepreneurs looking to fuel their ideas in the current economic climate.

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Helping The Indian MSME To Go Global With International Cooperation Scheme

Aakash Sharma — Wed, 18 Aug 2021 03:35:10 +0000

The International Cooperation Scheme is a demand-driven programme through which the Government of India provides compensatory financial assistance to small businesses. It assists eligible Central or State government organisations, registered industry associations, companies, and trusts to support and strengthen the Micro, Small & Medium Enterprises (MSME) sector.

The SME division of the Ministry of MSME is primarily responsible for the overall administrative oversight and implementation of the International Cooperation Scheme and assistance to training institutions.

Who have received how many benefits yet?

In 2020-21, the government reimbursed Rs.1.67 crore to 80 micro, small and medium-sized enterprises in the Indian coir sector (an agro-based rural industry) to participate in international activities abroad as part of the International Cooperation Scheme.

Under the plan, Rs.3.59 crore were released in 2018-2019 to promote 454 small, medium and micro-enterprises. During 2017-18, the government released financial aid of Rs.4.08 crore for enabling 723 MSMEs.

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The International Cooperation Scheme aims to realise the goal of ‘Vocal for Local’ and help Indian small businesses to have a robust impact on the formal economy.

Objective of the International Cooperation Scheme

While several government programmes are already in place to support Indian SMEs and MSMEs, which are also hard nailed by the COVID-19 pandemic, the International Cooperation Scheme aims to achieve more specific objectives.

They are:

Technology injection and update of Indian micro, small, and medium enterprises (MSMEs)

Promotion of the export arm of MSMEs

Modernisation of MSMEs

The plan includes the following activities:

Delegating MSMEs to international trade fairs/exhibitions in other countries to explore new areas of technology upgradation, facilitate joint ventures, enhance MSME’s product markets, and cooperate with foreign countries.

Attending and participating in international exhibitions, fairs and meetings of overseas buyers and sellers for Indian SMEs and micro-enterprises.

Participation of Indian MSMEs in International conferences/ trade exhibitions held in India has international participation.

Holding global Conferences and Seminars on topics and themes of importance to the Indian MSMEs.

Organising International Conferences/ Seminars/ Workshops in India by the Ministry of MSME or its subordinate organisations.

Providing financial assistance for airfare and space rent on a reimbursement basis.

Who can apply

Registered public bodies and industry associations involved in promoting and developing the MSME sector can apply for the International Cooperation Scheme.

The qualification conditions for monetary assistance under the program are as follows:

The claimant must be a registered organisation (e.g., companies under the Companies Act, societies under the Societies Act, etc.) whose primary purpose is to promote and develop MSMEs.

The organisation must have been involved in such activities for at least three years and have a good track record.

The organisation should have periodically reviewed the accounts for the last three years.

The activities of a business to be funded under the programme should have a robust international significance.

How to apply: Procedure for accessing financial assistance under the programme

Applicants may request financial assistance in the form prescribed by the Ministry (available at www.msme.gov.in) to the Director (International Cooperation), Ministry of MSME, Udyog Bhavan, New Delhi-110011. An estimated budget for programme proposals and other relevant documents are required for the application.

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