At the heart of the Indian economy lies the Micro, Small, and Medium-Sized Enterprises - MSME segment, playing a vital role in India's overall GDP as a driving force of growth and innovation. Borzo (erstwhile WeFast), a global intra-city delivery service, has conducted a comprehensive study aimed at gaining insights into the operational dynamics of Micro, Small, and Medium Enterprises (MSMEs) and their delivery requirements.

In addition to facing various pain points such as Financing, Packaging Solutions, Manpower and Inventory Management, MSMEs now face the imperative of meeting the burgeoning demand with the help of Fast (speed), accurate, and cost-effective same-day deliveries. The study on understanding MSMEs preferences was carried out through a survey that delved into various aspects of MSME operations, including shipment preferences, order volumes, business needs, Pain points and more. The survey focused on MSMEs availing logistics support for maximum 20kg load. Here's a detailed breakdown of the key findings:

1. MSME Leadership:

• MSMEs are often led and driven by Business owners which is evident as nearly three-fourths (74%) of respondents identified themselves as business owners, indicating a significant proportion of entrepreneurial representation in the survey. 26% of MSMEs are led by various managers in the roles of operations/logistics managers, sales managers, and marketing managers, highlighting the diverse range of leadership involved in MSME operations.

2. Top 6 MSME Pain Points and Challenges

• Amongst the key pain points faced by MSMEs, Customer Acquisition is a prominent challenge as 16% MSMEs cite it to be a big pain point. At 13% Recruitment is another big challenge hindering MSMEs. Packaging and Inventory Management at 12% and 11% respectively pose significant operational challenges for MSMEs. 

• Debtors/Payment Collection at 8% and Lack of Financing at 5% are a hindrance to the cash flow of MSMEs. In addition to this, various other pain points such as Operational efficiency, Pricing and margins and Competition are some of the other challenges that MSMEs have to navigate.

• To Champion MSMEs' cause and provide them with effective solutions to solve their  major pain points, Borzo is organizing a large-scale MSME conference titled Borzo Connect at NESCO, Mumbai on June 21st, 2024, log on to https://borzoconnect.com/

3. Business Operations:

• Shipping Destinations:

• MSMEs have been able to cater to multiple cities through Logistics support. Over 70% of shipping by MSMEs takes place in Mumbai, Delhi, Bangalore, Hyderabad, Kolkata, Chennai, Pune, Ahmedabad and Jaipur. Some of the notable Smart cities, Tier 2 and Tier 3 cities that are gaining momentum amongst MSMEs include Vadodara, Nagpur, Kochi, Jammu, Nashik, Rajkot, Indore, Surat, Chandigarh, Ludhiana, Roorkee, Raipur, Guntur,  Mangalore, Jodhpur, Malegaon, Dehradun, Haridwar, Ranchi, Aurangabad, Ratlam, Faridabad to name a few.

• Same City Domination:

• Nearly half of the respondents (50%) reported that more than 70% of their total orders consist of within the same city, highlighting the significance of intra-city deliveries for MSMEs. 

• Product Categories:

• MSMEs with diverse product categories were represented, with food & beverages being highest at 23.1%, apparels and fashion at 13.6%, gifting, pharma, textiles, and others showcasing the diverse range of offerings by MSMEs.

• Retail vs. Online Business:

• The survey revealed a balanced distribution between retail and online businesses, with a significant proportion (31.5%) operating through both channels Retail and Online, indicating a multi-channel approach adopted by many MSMEs. Only Retail MSMEs were 29.6% and 40% were online businesses.

4. Delivery Timeline:

• Giving a new spin to the debate of quick commerce and 10-minute delivery, majority of MSMEs (59%) preferred delivery within 60 minutes, emphasizing the importance of meeting customer expectations and business requirements. 20.5% MSMEs prefer any timeline but same-day delivery.

• 72% MSMEs prefer Speed and Quality of delivery to ensure a seamless experience for their customers and vendors. 18% MSMEs value speed as opposed to quality whereas 10% value quality over speed of delivery.

5. Business Performance:

• Monthly Shipment Value:

• The average Monthly shipment value of MSMEs is approximately Rs 1.4 million  per month. On the lower side it ranged between Rs 50,000 to Rs 2,00,000 per month and on the higher side it was in the range of Rs 50 Lakhs to Rs 1 Crore. Over 80% MSMEs said that the Monthly shipment value is in the range of Rs 50,000 to Rs 10 lakh per month.

• Change in Shipment Value since Last Year:

• Shipment value refers to the total value of products in the shipment. The survey revealed that Majority of MSME, 56%, received an increase in shipment value by 20%-30% whereas 18% MSMEs experienced an increase of 50% and 15% MSMEs received an increase in shipment value in the range of 30% to 40%. All MSMEs have not been doing that well as 2.6% 

• Nearly 3% MSMEs experienced a decrease in shipment value by more than 50%.  The varied trends in shipment value, with more than 95% MSMEs showing an increase compared to last year, significantly highlights the potential growth opportunities for MSMEs and does not show economic slowdown.

• Economic Slowdown:

• A staggering 78.6% MSMEs believe that there is no slowdown in their business but rather there is an increase in demand. However, 21.4% of MSMEs said that they are facing a slowdown in business. 

6. Key Business info:

• Average Ticket Size of Online Orders:

• The average per order ticket size is in the range of Rs 750 to Rs 1500. On some days, the average ticket size per order can drop below Rs 750 in the range of Rs 180 to Rs 650 and can increase to the range of Rs 2500 to Rs 3500. 

• The daily average ticket size of orders are in the range of Rs 9500 to Rs 15,000.  MSMEs experience a rise in daily ticket size of orders in the range of Rs 18,000 – Rs 22,000.

• Average Monthly Orders:

• Majority 51% MSMEs receive an average of less than 1000 orders per month. Approximately 25% of MSMEs receive orders in the range of 1000 TO 10,000 monthly. 6.6% MSMEs received orders in excess of 10,000 per month. The scale and range of average monthly orders reflects the diverse scale of operations among MSMEs. 

7. Sustainability and Automation:

• Use of Sustainable Packaging:

• A staggering majority (66.6%) of MSMEs reported using sustainable packaging materials, indicating a growing emphasis on environmental responsibility within the business community. 33.3% MSMEs have not yet transitioned towards eco-friendly packaging materials.

• Packaging material:

• Sustainable packaging materials that MSMEs use on a daily basis include Bagasse and Biodegradable boxes, Cardboard boxes, Corrugated boxes, Cloth bags, Large paper envelopes, Jute bags and envelopes, Paper bags, Recyclable Plastic like Bubble wraps, Bio plastic to name a few.

• Automation in Supply Chain:

• The survey highlighted a high adoption rate (85%) of supply chain automation among MSMEs, amplifying the tech adoption in MSMEs, efficiency and scalability in operations.

“At Borzo, we hold the belief that the SME sector constitutes the foundation of the Indian economy. From the bustling streets of Mumbai and burgeoning markets of Delhi, to the buzzing Tier 2 cities, MSMEs stand as pillars of innovation and growth. While challenges such as financing, sales and customer acquisition, inventory management persist, MSMEs are also embracing the need for  sustainable packaging, precise, and cost-effective same-day deliveries to meet evolving customer demands. Companies allied to serving MSMEs need to envision and ensure that MSMEs thrive amidst evolving processes and technology and are gaining significant knowledge to do so. Given the diverse nature of cities, varying routes, and delivery requirements, MSMEs need robust logistics assistance to fuel their expansion.”, Mr. Eugene Panfilov, Managing Director, Borzo India and Regional Director, Borzo, Brazil.

MSMEs rely heavily on on-demand logistics same day delivery to fulfil their orders timely. In addition to using Borzo, MSMEs also avail logistics services of various companies in different capacities, showcasing a diverse range of delivery options available to MSMEs.

To address various MSME pain points Borzo is organizing a large-scale MSME meet called Borzo Connect in Mumbai on June 21st, 2024. Borzo Connect aims to bring MSMEs from Mumbai under one roof and provide them with networking opportunities. Borzo Connect is expected to host thousands of MSMEs and corporations at NESCO in Mumbai. For more information about the event, visit: https://borzoconnect.com/

In India, Borzo has a fleet of over 80,000 delivery partners who serve the Enterprise hyperlocal and SME segment.

MSME Survey.pdf