Have you ever bought a block of artisanal cheese, a pretty scarf from a local seamstress, an organic hair shampoo, or even a custom electronic gadget? These are just a few of many examples of how MSMEs are part of our everyday lives. Micro, small and medium enterprises (MSMEs) touch the lives of millions of people, impact local and global economies, and affect communities and nations in many ways. To celebrate their contributions and importance, the UN General Assembly declared June 27 as MSME Day in 2017.
Are MSMEs really that important?
- According to the UN, MSMEs account for 70% of employment in the world economy.
- International Labor Organization (ILO) emphasizes: "Micro, small and medium-sized enterprises are responsible for more than two-thirds of all jobs worldwide. They also account for the majority of new job creation."
A report on MSME from the UN Department of Economic and Social Affairs states:
- In lower-income economies, a large share of MSMEs are informal enterprises and serve as a source of livelihood for the base of the pyramid population
- MSMEs, through work-based learning programs (e.g., career education and internship), could become informal educational service providers
- MSME contributions to Technical and Vocational Education and Training (TVET) programs in different countries have addressed skill gaps
- There are roughly 9.34 formal million women-owned SMEs, according to International Finance Corporation, which is approximately one-third of all formal SMEs
- Economically empowering hundreds of thousands of women puts them in a better position to afford healthcare and education for their families.
- The World Bank estimates 40% of national income (GDP) in emerging economies to be the contribution of formal SMEs
- SMEs are engines of economic growth and social development and they are crucial to economic progress
MSMEs have the potential to fuel the growth of vulnerable communities, offer vital support to big businesses in the form of vendors or freelancers, and have a ripple effect on the economy. They also bring new ideas and innovation to the industry, since the nature of independent business includes having to do the best with limited resources.
MSME, MENA, and Retail
The retail sector in GCC/Middle East countries is growing at a fast pace due to the rise in population, young demographics, growing income levels, and rising consumer demand. Research conducted by Visa Middle East found that GCC consumers have the highest mobile and online market penetration, which enabled them to jump straight to mobile commerce and operate across digital platforms with ease.
An article by Statista states that the retail market size for GCC countries is estimated to touch $3.8 billion by 2023. In 2021, the Governor of Monsha’at, Saleh Al-Rasheed announced that the contribution of SMEs to the Kingdom’s GDP grew to 28.7%.
The Middle East and North Africa (MENA) market has grown from $18.6 billion in 2016 to $41.5 billion in 2020. This makes the MENA region a hub for substantial e-commerce growth in the near future. We also can't forget that a large portion of SMEs comprises retail businesses, and that makes the growth of the SMEs and retail in MENA an even more pertinent point.
MENA-based SMEs represent 96% of registered companies in the region. As Adeeb Ahamed states in his article for World Economic Forum, "The Middle East and North Africa (MENA) region is at a critical juncture, facing the imperative to create jobs for the 20 million young people expected to join the workforce by 2025. Small and medium enterprises (SMEs) could play an instrumental role in tackling this challenge, given their potential to create jobs, foster innovation and contribute to growth."
Challenges and solutions
MSMEs often have to overcome challenges while starting, operating, and growing their businesses. They face problems in accessing finance, technology, markets, and other critical resources. Especially in Retail, MSMEs need the right technology and tools to help them improve productivity and digitize rapidly to tackle the new business environment.
Zoho has always tried to help MSMEs solve a critical area of improvement: technology. Experts say that SMEs are at the risk of not keeping up with digitization. In particular, the MEA (the Middle East and Africa) region is said to have been slow in adopting ecommerce, for instance. In the wake of the COVID-19 pandemic, digitization has gathered pace, but there is still much room for improvement. We strongly believe in building ecosystems that will empower micro, small, and medium enterprises to grow and succeed.
- Zoho Commerce's easy-to-build ecommerce software provides MSMEs with a technology stack that is comprehensive, powerful, affordable, and secure.
- Perceiving how MSMEs function, we try to create a simple platform that does not require an expert understanding of technicalities.
- Our plans start as low as $22 per month, and businesses do not have to spend additional money on plugins or other apps.
- Commerce comes with built-in apps, whether pre-designed ecommerce store themes or shipping and payment integrations. The platform is comprehensive, which can be particularly helpful for small businesses since they can avoid the hassle of using multiple apps.
- Zoho's privacy and security policies are strong and allow customers to decide when, where, and how much of their information is used.
Small is beautiful
We cherish this community of inspiring entrepreneurs who undoubtedly have the power to affect societies and nations, and we strive to assist them in their business journey by giving them an intuitive, comprehensive platform.
To honor MSMEs, Zoho is rewarding promising businesses with $1500 worth of benefits. MSMEs in the Middle East and Africa can nominate themselves for a chance to enjoy up to a year of free access to Zoho Commerce, including training, implementation, support, and a shout-out on social media.
Interested? Learn more about our opportunities for MSMEs here.