Offline SMBs in India witnessing 8% decline in revenue growth: Report

Less than a third of SMBs in India are using cloud tools to store data, market their business, or manage relationships with their customers.

Arti Singh July 24, 2015 14:58:37 IST
Offline SMBs in India witnessing 8% decline in revenue growth: Report

Small and medium businesses (SMBs) in India that use cloud and mobile tools are reaping huge dividends, according to a report released by Deloitte and Google. Moving from offline to advanced digital engagement could see revenue growth up to 27 percentage points higher for individual SMBs.

However, two thirds of Indian SMBs are currently missing out, according to the report 'Connected Small Business: Unlocking India’s Digital Potential'.

Offline SMBs in India witnessing 8 decline in revenue growth Report

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The survey of 500 businesses analyses the digital engagement of Indian SMBs to understand how digital technology could help them, and what that would mean for India as a whole.

Compared with offline SMBs, India's digitally advanced SMBs are more successful businesses; job creators -- up to 84 percent more likely to increase employment; exporters -- up to 65 percent more likely to access international markets; innovators -- up to 4.5 times more likely to offer new products or implement major changes in the way they do business; have more satisfied employees -- being up to 6 times more likely to have higher levels of employee job satisfaction; and have increased employee collaboration -- up to 9x more likely to have frequent collaboration between employees.

“India has huge potential to become one of the biggest economies in the world and digitisation is one of the important factors that can make a significant difference,” said Prakash C Prabhakar, Director, Deloitte in India. “While conducting this study, we realised that two-thirds of Indian SMBs are missing out on a huge digital opportunity. In today’s time, technology is a critical success factor and can be the differentiator between success and failure.”

Interestingly, the report revealed that one-third of Indian SMBs operate totally offline - with no devices and have no online presence. These businesses see their revenues declining 8 percent annually.

A further 31 percent of Indian SMBs only have basic digital engagement. These businesses experience annual revenue growth that is 8 percentage points higher than a base group of offline businesses.

However, those businesses that are digitally advanced are growing 19 per cent annually.

Majority of Indian SMBs are not taking full advantage of digital technologies. In particular, the report found that while Indian SMBs are highly active on social media, they are less avid users of e-commerce and online advertising. Over 80 percent of respondents are using some form of social media platform to promote their business and almost 40 percent use mobile messaging platforms. In comparison, only around a quarter of respondents had e-commerce capabilities or listed their business on online directories services.

Less than a third of SMBs in India are using cloud tools to store data, market their business, or manage relationships with their customers. This represents a significant opportunity for SMBs in India to capture the digital dividend from cloud technologies.

Offline SMBs in India witnessing 8 decline in revenue growth Report

SMBs can play a key role in India’s growth agenda and help unlock a path to balanced economic growth, the report adds. As India looks to lift is GDP growth to 8 per cent each year, digitizing the SMBs can help in the creation of 50 million new non-agricultural jobs, the report further added.

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