Round two-thirds of small and medium companies (SMBs) in India used on-line channels to promote their services and products in 2021, a survey by digital lender NeoGrowth Credit score confirmed. Nevertheless, the survey discovered that regardless of rising digital adoption, money gross sales remained the highest fee mode by far, and day-to-day digital operations had been principally restricted to statutory tax-related features.
The survey, carried out between February and December final yr, lined 9,564 SMB homeowners, of which 93% had annual income of lower than ₹1 crore. NeoGrowth is a fintech agency primarily serving under-banked SMBs.
Arun Nayyar, chief govt officer of NeoGrowth, attributed the expertise adoption to the “unprecedented financial, social, and enterprise disruptions because of the pandemic”.
Enterprises within the attire section had been the most certainly to promote on-line (77%), adopted by cell and equipment (73%) and the meals and beverage section (67%). On-line gross sales by SMBs had been the most typical in Mumbai (81%), Bengaluru (66%), and Hyderabad (63%), with Fb and Instagram turning out to be the preferred platforms throughout cities.
Whereas comparable pre-pandemic figures for digital adoption amongst Indian SMBs usually are not accessible, a rising development has been noticed worldwide. A 2021 report by the Organisation for Financial Co-operation and Improvement (OECD) cited different surveys to counsel that as many as 70% of such corporations globally “intensified” their use of digital instruments because of the pandemic, and “many of those adjustments had been poised to final given the investments made and enterprise advantages of the brand new fashions”. A Salesforce survey in mid-2021 additionally discovered that 63% SMBs globally had an e-commerce presence now since prospects more and more wished to transact digitally.
SMBs in India use instruments reminiscent of Google My Enterprise (35%), WhatsApp (13%), and Fb or Instagram (7%) to listing their services and products for discoverability, the NeoGrowth survey discovered. Companies in Mumbai had been the “most discoverable” on-line (24%), adopted by Bengaluru (13%) and Delhi (8%). Segments reminiscent of attire, meals and beverage, FMCG, pharmacies and spas and salons had been the most certainly to choose Fb and Instagram for discovery. For buyer engagement, critiques and scores on Google and JustDial had been the preferred modes.
Using digital instruments brings vital advantages, reminiscent of decrease transaction prices, faster entry to info and communication with workers and suppliers, amongst others, stated the 2021 OECD report. Nevertheless, many SMEs lag bigger corporations in digital adoption, which threaten to extend inequalities amongst folks, locations and corporations, the report stated.
The disparity may additionally be true for India. Regardless of the beneficial properties, money funds nonetheless rule the roost, with 70% SMBs choosing such funds and simply 16% for UPI funds, discovered the NeoGrowth survey. Digital funds adoption was the best within the petrol pump section (32%), cell and equipment (28%), F&B (27%), and pharma (26%).
SMBs have additionally not but taken to on-line instruments to ship their services and products, with as many as 50% conducting supply by way of their workers. Digitalization of day by day operations remains to be principally restricted to GST and revenue tax submitting (for which 67% of corporations reported utilizing digital instruments), whereas simply 7% of corporations used digital instruments for billing and inventory administration. Digital inventory administration was extra common in Mumbai, and digital billing and accounting in Kolkata, Hyderabad and Bengaluru.
“The survey finds challenges reminiscent of lack of knowledge of varied digital options, lack of enterprise attributable to restricted attain, and inefficient stock administration resulting in delays and enterprise losses,” Nayyar stated.
Supply: Live Mint