88.8% respondents affirmed that digital services are essential to their business success
New Delhi : A new survey from The Dialogue, a leading public-policy think tank, highlights how the proposed Digital Competition Bill (DCB) could impact India’s burgeoning digital economy, comprising of micro, small, and medium enterprises (MSMEs) and startups that heavily rely on digital services for their operations and growth. As these businesses form the backbone of India’s economy, policies like the Digital Competition Bill must strike a careful balance between ensuring fair competition and supporting India’s entrepreneurial ecosystem and encouraging innovation.
The new report titled, “Implications of the Proposed Digital Competition Bill for Small Businesses in India: A Survey-Based Study,” is based on a survey of over 300 respondents, majority of whom are MSMEs (96%) and startups (89.6%). These businesses represent a broad spectrum of users and providers of digital goods and services across India.
The survey highlighted that digital services have become indispensable for MSMEs and startups, with 82.2% citing increased market effectiveness and 76.4% reporting improvements in business expansion capabilities. Entrepreneurs acknowledged benefits such as cost-effective operations, seamless access to new markets, and faster rollouts of new products and services.
Respondents also emphasized cost optimization as a pivotal advantage offered by digital services. A significant majority, 69.1%, noted reduced customer acquisition costs and operational expenses, while 64% cited better returns on marketing investments. Additionally, logistics and advertising expenditures were optimized through the strategic use of digital platforms, further underlining their efficiency-driven benefits.
The findings also raised concerns about the potential unintended consequences of the DCB. Provisions such as restrictions on tailored ad placements and prohibitions on bundled services could disrupt operational efficiency. Notably, 71.6% of respondents foresee adverse impacts on their advertising reach if personalized ad placement capabilities were curtailed, while 47.7% anticipate challenges if bundled services like integrated payment systems or special promotional deals were restricted.
Based on the findings, the report also suggested a balanced approach to regulating digital markets. Policymakers are urged to conduct a comprehensive cost-benefit analysis of the DCB to understand its potential impacts on MSMEs and startups. Rather than introducing blanket regulations, targeted measures focusing on specific anti-competitive practices are recommended. Leveraging the existing enforcement capabilities of the Competition Commission of India (CCI) could address concerns in a more flexible and context-sensitive manner.
The study highlights that special attention must be given to preserving innovation and maintaining market dynamics that have spurred growth in the digital economy.
New Delhi : A new survey from The Dialogue, a leading public-policy think tank, highlights how the proposed Digital Competition Bill (DCB) could impact India’s burgeoning digital economy, comprising of micro, small, and medium enterprises (MSMEs) and startups that heavily rely on digital services for their operations and growth. As these businesses form the backbone of India’s economy, policies like the Digital Competition Bill must strike a careful balance between ensuring fair competition and supporting India’s entrepreneurial ecosystem and encouraging innovation.
The new report titled, “Implications of the Proposed Digital Competition Bill for Small Businesses in India: A Survey-Based Study,” is based on a survey of over 300 respondents, majority of whom are MSMEs (96%) and startups (89.6%). These businesses represent a broad spectrum of users and providers of digital goods and services across India.
The survey highlighted that digital services have become indispensable for MSMEs and startups, with 82.2% citing increased market effectiveness and 76.4% reporting improvements in business expansion capabilities. Entrepreneurs acknowledged benefits such as cost-effective operations, seamless access to new markets, and faster rollouts of new products and services.
Respondents also emphasized cost optimization as a pivotal advantage offered by digital services. A significant majority, 69.1%, noted reduced customer acquisition costs and operational expenses, while 64% cited better returns on marketing investments. Additionally, logistics and advertising expenditures were optimized through the strategic use of digital platforms, further underlining their efficiency-driven benefits.
The findings also raised concerns about the potential unintended consequences of the DCB. Provisions such as restrictions on tailored ad placements and prohibitions on bundled services could disrupt operational efficiency. Notably, 71.6% of respondents foresee adverse impacts on their advertising reach if personalized ad placement capabilities were curtailed, while 47.7% anticipate challenges if bundled services like integrated payment systems or special promotional deals were restricted.
Based on the findings, the report also suggested a balanced approach to regulating digital markets. Policymakers are urged to conduct a comprehensive cost-benefit analysis of the DCB to understand its potential impacts on MSMEs and startups. Rather than introducing blanket regulations, targeted measures focusing on specific anti-competitive practices are recommended. Leveraging the existing enforcement capabilities of the Competition Commission of India (CCI) could address concerns in a more flexible and context-sensitive manner.
The study highlights that special attention must be given to preserving innovation and maintaining market dynamics that have spurred growth in the digital economy.