Due to the pandemic and its accompanied lockdowns, people across the world had been forced to stay indoors and connect digitally. While it was the fear of transmission that stopped many from venturing out, others have now grown accustomed to the convenience of shopping digitally. Consumers and merchants have accepted that digitalisation and interconnected worlds are the new way of life. This change in consumer behaviour is likely to have a lasting impact on the global economy.
Ecommerce adoption has seen unprecedented growth. Research by United Nations Conference on Trade and Development (UNCTAD) indicates that more and more consumers now purchase products online more frequently than they did before the pandemic. This presents a global opportunity, especially for small businesses and entrepreneurs who have reworked their business models from offline to online. With this shift, businesses now can leverage a global opportunity. Three factors validate this further:
- Emergence of a new digital demographic referred to as the ‘Silver Tech’ generation – consumers aged between 50-70 are now increasingly using online shopping services. The growing digital connectivity has enabled them to buy their desirable products or services from anywhere across the world, rather than a shop around the block
- As economies come out of the pandemic and show green shoots of recovery, there is an increase in global demand
- Growing acceptance of digital payments have solved the trust deficit between consumers and sellers, enabling seamless cross-border trade
Exports represent a US $526 opportunity for small businesses to benefit from as per PayPal’s Cross Border Trade (CBT). Of this, close to 60% of exported items are goods which represents a market worth US $313 billion for India’s local artisans of tribal products, handicrafts or small exporters of Gems & Jewelry. The advantage to leverage the global B2C demand is endless as adoption of online shopping has opened the floodgates to purchase custom-made goods from anywhere in the world.
Some of the best performing sectors are Gems & Jewelry, Ready-Made Garments, Leather Products, Electronics and Handicrafts, clocking in US $60 billion – close to 19% of the total goods exports. Manufacturers in this space have immense scope to leverage international demand.
India’s deep connection to precious gems and jewellery results in a global cross-border opportunity
Since the beginning of civilization, gems and jewellery have played a prominent role in shaping India’s culture. Over time, it has cultivated a deep connection with the heritage, so much so that India is now recognized as one of the leaders in the exports of these products. At present, India exports US $34 billion worth of precious gems and jewellery, presenting a huge global B2B and B2C opportunity for Indian businesses.
Exports of ready-made garments represent a US $16 billion opening
As one of the largest producers of cotton, international demand for Indian ready-made garments, including accessories is evergreen. Manufacturers of fibers and other textile materials will reap benefits of cross-border trade as these come in as the next most significant export segment.
Over 45% of the demand is concentrated in three markets – USA, UAE and UK. Much like other segments, ready-made garments represent a huge B2C opportunity for Indian businesses, especially those in Tamil Nadu as 32% of the supply is driven from Chennai and Tirupur.
The global trade industry is competitive, but with the right support and insights, our home-grown brands have the ability to thrive and enjoy a large market share of international demand. The boost in ecommerce and digital transformation has made it possible to convert the pandemic into tailwind and create a virtuous cycle that will contribute to India’s growth story.
* PayPal’s Cross Border Trade (CBT) report delineates the opportunity exports presents to MSMEs and freelancers. This is the 4th article of a 5-part series on PayPal’s CBT report through which 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.