MSMEs Deem Current Data Regulation 'Excessive': Report

A majority of medium and small enterprises surveyed by Indian SME Forum said that current data and digital regulations are getting in the way of business efficiency and productivity. The framework hinders businesses from breaking into new markets and reaching more customers, they said.

The report surveyed 1,000 MSMEs for insights into how digital tools figure into their operations.

The MSMEs reported that there was "excessive regulation" on personal and non personal information, which created "compliance burdens". This interfered with their ability to gain a foothold in markets, continue to compete and scale their business.

These digital tools used to serve as an advantage to MSMEs as a cost-effective and scalable method to compete with larger established brands and create their own brand recognition and business growth.

"Many MSME members have expressed that the current overall regulatory framework for personal data and non-personal data is overly restrictive, creating compliance burdens that hinder their ability to market effectively and engage with customers," the report said.

Close to 71% of MSMEs advertising on Google Search, 70% advertising on YouTube, and 69% creating awareness for their product on Amazon are concerned that losing out on ad targeting would be a major problem for them, according to the report.

About 73% of advertisers on Facebook and 70% of those on Instagram said they no longer had adequate access to WhatsApp data for ad targeting, which will adversely affect their business.

Around 60% of MSMEs rely on WhatsApp for business for direct sales, marketing, and customer interaction, and 76% say losing these features would be a serious operational setback.

The report called for reducing compliance burdens on small businesses that rely on third-party advertising and data analytics. It also suggested ensuring the protection and availability of targeted marketing solutions for MSMEs in India.

(With inputs from PTI).