Let’s Get Local for Local

Context: An overview of new vision and adaptations needed in the MSME sector, addressing the changing market dynamics.

Pathways before MSMEs: Focus on the micro-level of where each MSME lies and the segmentation it wishes to appeal to:

• ‘Local for local’ should be their first priority: Since MSMEs’ strengths are nimbleness, keeping costs low and catering to local consumers.
  • Think of being No. 1 or No. 2 in the state that one function in, rather than India as a whole.
  • MSMEs can then become smarter and outcompete larger companies by producing quality products and communicating the benefits clearly (never overstate the benefits).
  • They can have a lower consumer price for demand-pull or give a higher retail margin for demand push compared to their bigger competitors.
  • Many brands have been built like this — Bisk Farm (biscuits in West Bengal), Sapat (tea in Maharashtra), etc.
• Leverage traditional and new channels of advertisement: Like print media, social media, outdoor advertising and radio.
• Innovate marketing strategies: Backing tie-ups with retail chains could save on distribution cost.
  • For e.g. Khadi and Village Industries Commission (KVIC) started supplying and marketing local rural products and will be adding 30 lakh, new members to its consumer base.
• Address changing preferences of consumers: Like preference to tier-2 and tier-3 cities, increased online shopping and Work From Home (WFH) (which has led to reverse retail migration).
  • Post-Covid, tier-2 and tier-3 consumers are expected to contribute 55-60% of online grocery demand.
• Focus on building trust: For e.g. Ghari Detergent in Uttar Pradesh succeeded in building consumer trust and moved to the Hindi heartland after building a brand across UP’s towns and villages.