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Internet's Role in the performance of India's SMBs

SMBs with an Internet presence get a significant boost in sales and customer base than those that do not, according to joint study between Google and India's peak business association FICCI.
  • Amongst SMBs that use the Internet, 69 percent experienced an increase in customers, and 63 percent an increase in geographic reach and 44 percent saw an increase in firm employment.
  • On an average, an SMB adopting the Internet is able to grow its customer base by 7 percent and employment growth by 4 percent. 
  • Doubling of Internet use in SMBs can generate 43 percent higher profits for SMBs.
  • Only 23 percent of surveyed SMBs engage in e-commerce; on average they have more revenue, employees, and customers than those that do not.

SMBs role in India

SMBs are critical to the economic growth in India, where 47 million SMBs employ about 100 million people and contribute more than 8 percent of India's GDP. No developing country with fast growing economy can rely only on its big companies to achieve sustainable growth, and these businesses are leading the way for small Indian business looking to go big online. In the last five years, Internet has had a direct impact on how both consumers and businesses engage with each other.

Major Concerns

Only 5 percent of SMBs in India have a Web site. Despite the advantages, few concerns hinder Internet adoption and prevent SMBs that have adopted it from realizing its full potential. Technology and Mobile Revolution are expected to quicken the growth in the SMB sector in the coming years. 
Internet can be a great equalizer for SMBs, providing them with access to new markets, more customers and visibility so as to unleash their potential. However, with 95 percent of businesses yet to even establish a Web site; India is poised for big gains as more small enterprises come online.

There is a need for thoughtful leadership. There is a need for technology and mobile industry leaders to come on a common platform and develop a channel network for the development and awareness of SMBs. Enable them with the right solutions. Also we hope that government help SMBs on IT investments and other challenges depending on geography or nature of business where power cuts and bad network connectivity, are some set of issues. Enable them with individualized suites of services and products which are required to enable SMBs realize the full potential of their investments. There is a need for the government to  join hands with Industry and help India realize the value of the Web and put India back on a trajectory of economic growth.

Challenges faced by SMBs

Major concerns that hinder Internet adoption/technology:
  • Don’t have a website: Major Roadblocks> No Budget & Capabilities, No Right Tools Available, No Cost Effective Solutions, Lack of Knowledge & Understanding
  • The security of online financial and personal transactions. 
  • Lack of access to capital and the in-house IT expertise. 
  • Face problems of power cuts and bad network connectivity, which may not be a challenge for city-based organizations.
  • SMBs require 24x7 IT support, real time monitoring and instant trouble-shooting to help overcome any likely challenges during the course of business operations.
  • Managed services solutions that proactively monitor and trouble shoot problematic areas in the network and take care of potential issues even before they arise are most preferred.

The future

Clearly technology enables SMBs to grow and compete at a global level. SMBs are increasingly becoming aware that they need to map their requirements carefully so that technology solutions are aligned to business goals and aggressively adopt technologies that help achieve profitability. This is because the future holds promise for those SMBs who can connect IT investments to improved business performance.

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