NeoGrowth recently released the survey on ‘Digital Adoption Trends Among SMBs’, which indicated that about 66% of small and medium businesses (SMBs) across India have migrated to online sales.
The survey to understand key digital adoption trends among SMBs in India, was conducted from February – December 2021 on the company’s proprietary diGibizz platform, and garnered responses from 9,564 small and medium business owners in India. The SMBs were assessed on multiple factors such as their digital discovery, online selling, digital payments, digital delivery, digital operations, and digital customer engagement.
Digital Discovery measures the business’ online presence by evaluating its discoverability on different platforms such as search engines, website. Digital Delivery is evaluated by considering business’ partnerships with delivery platforms, online marketplaces, or delivery through their own digital order fulfilment model. Digital operations assess the business’ use of different digital tools/ platforms for bookkeeping, bulk ordering, and other such operations. Digital customer engagement measures if the business is leveraging social media, online feedback forms, campaigns, etc. to monitor customer satisfaction.
The survey saw participation from SMBs in multiple industries including, but not limited to, food and beverage (F&B), mobile & accessories, apparels, groceries (FMCG), pharmacies, spa and salons, petrol pump segments. A total of 93% of the SMBs had an annual turnover of less than INR 1 cr.; out of these, 69% had a turnover of less than INR 50 lakhs. Approximately 7% of the SMBs in the survey were owned by women.
SMBs adopted Facebook, Instagram and WhatsApp to establish their digital presence
77% SMBs in the apparel segment sold online, while the SMBs in mobile & accessories and F&B selling online stood at 73% and 67% respectively.
The survey also revealed that 81% SMBs in Mumbai sold online. This was followed by 66% SMBs in Bengaluru and 63% SMBs in Hyderabad selling online on different platforms. Facebook or Instagram remained the most popular platform across cities.
Google Business (35%), WhatsApp (13%) and Facebook or Instagram (7%) were the top three digital platforms where the SMBs had their listings for discovery. Interestingly, while 30% of SMBs had an online presence for business, they were not listed on these or any other platforms such as online directories, loyalty platforms, and did not even have their own app or website. Among the cities surveyed, SMBs in Mumbai were most discoverable online (24%), followed by Bengaluru (13%), and Delhi (8%). Facebook and Instagram were the most preferred online channels of discovery especially by apparel, F&B, FMCG, pharmacies and spas and salons.
UPI was the most prevalent mode of online payments across cities
Cash still ruled the roost with 70% opting for cash sales. UPI was the most popular online payment mode used by SMBs across cities to accept payments from their customers. Acceptance of UPI payments was highest among SMBs in Hyderabad at 22%, followed by Bengaluru at 18%. Digital payments adoption was highest among SMBs in the Petrol Pump segment (32%), followed closely by the Mobile & Accessories, F&B, and pharma establishments.
SMBs showed resistance towards adopting digital delivery
Delivery through their own staff was the most popular mode of delivery for almost 50% SMBs. Only 6% used online food delivery apps, and over 35% did not deliver at all. SMBs in Delhi showed the highest preference for delivery through own staff, whereas delivery through online apps was prominently seen among SMBs in Bangalore, Mumbai and Hyderabad.
Scope for SMBs to digitise operations beyond GST & IT filing
GST & IT filing was the most popular business operation to be digitised by 67% SMBs, followed by billing & accounting and stock management. Digital stock management was popular among SMBs in Mumbai, other than GST & IT Filing, while SMBs in Kolkata, Hyderabad and Bangalore showed a high preference to digitise their billing & accounting operations.
SMBs adopted various digital channels for customer engagement
Across segments, digital engagement with customers via reviews and ratings on Google, Just Dial, etc. was the highest, followed by promotions on SMS, WhatsApp and Email.
Speaking on the survey, NeoGrowth’s CEO Arun Nayyar,said, “With the unprecedented economic, social, and business disruptions due to pandemic, we witnessed SMBs adopting technology for integrating business operations for completely seamless operations. The Digital Adoption survey unearths challenges such as lack of awareness of various digital solutions, loss of business due to limited reach, and inefficient inventory management leading to delays and business losses. Our platform, diGibizz, launched a year ago, connects these small business owners with an ecosystem of partners providing a plethora of services and products for SMEs, thereby providing access for becoming digital ready and fuelling growth. We aim to empower small businesses with the right digital solutions to make them resilient and scale up their businesses.”
Since its inception in 2013, NeoGrowth has successfully maintained its unique product proposition by providing collateral free, short-term, quick, and customized business loans on flexible repayment terms. NeoGrowth also offers secured Plus loans up to INR 1.5 crore to its SME customers. Having disbursed more than USD 1 billion in loans, NeoGrowth has been funding and enabling MSMEs to grow and sustain their businesses while continuing to tread on its mission of achieving inclusive growth.
