Indian SMBs are leveraging digital technologies across business processes, driving top line growth, maximizing output and deriving cost efficiencies; powering India into the future. Modern ‘Digital SMB’ is powered by solutions touching multiple business levers
Indian SMBs are leveraging digital technologies across business processes, driving top line growth, maximizing output and deriving cost efficiencies; powering India into the future. Modern ‘Digital SMB’ is powered by solutions touching multiple business levers such as customer acquisition, workforce enablement, operational excellence and risk management.
A recent study by Zinnov on ‘Digital SMBs’ reported that, digital enablement is going to present a USD 25.8 Billion for tech vendors by 2020. India is home to over 51 Million Small and Medium Businesses. While today only 40% of these SMB’s are influenced by technology, the number is expected to increase to 90% of all SMB’s by 2020. IT adoption by SMB’s in India is hindered because inability to easily adopt solutions meant for large enterprises. They aren’t in a position to invest upfront in infrastructure, most solutions offered to them in the market are generic and lack vertical centricity, and majority of the solutions are feature rich solutions with high learning curve.
Exploding smartphone usage with a near universal adoption by 2020, affordable enterprise grade solutions such as cloud solutions and mobile app ecosystem are increasingly driving SMBs towards digital enablement. 9000+ mobile app development companies are making it possible for SMBs to adopt solutions. Adoption of IT across customers and push from ecosystem stakeholders is fueling SMBs’ digital journey. By 2020, consumers will be spending 1500 million hours of their time on the internet and the e-commerce market is expected to reach USD 70 billion.
With the ‘Digital India’ campaign it is likely that the Indian government spending on IT will touch USD 7.2 billion by 2015. Digital enablement of Indian SMBs presents a multi-billion dollar opportunity for tech vendors. It is projected that this number will upsurge from USD 11.6 billion to USD 25.8 billion by 2020. Top 8 states in India constitute over 50% of the overall opportunity in digital enablement of SMBs. Maharashtra has the highest share in opportunity (8.1%) led by professional services, restaurants, and retail verticals. Tamil Nadu’s is next in opportunity with 6.9% market share. Gujrat and Uttar Pradesh hold a share of 6.8% and 6.5% respectively. Karnataka, Delhi NCR and Andhra Pradesh have a share of 6.1% each. Kerala presents 5.9% of the digital enablement opportunity mainly within the logistics sector. Strategic initiatives required to be set in motion to tap into the digital SMB opportunity.
To successfully target SMBs we need a 3-pronged approach:
Zinnov estimates an opportunity of USD 3.8 billion in provision of customer targeting and engagement solutions to Indian SMBs. Avenues to enhance discoverability, such as website creation and portal listings, constitute a large market within SMBs. In addition, enabling SMBs to sell over internet can potentially drive annual revenues.
In another estimate made in the study, there is an opportunity of USD 2.5 billion in provision of Operational Excellence solutions to Indian SMBs. SMBs require solutions that help address issues around inventory management, efficient logistics and overall efficiency of operations. Overall market for operational excellence solutions is expected to grow at a CAGR of 17% to reach $5.5 billion by 2020. Workforce hiring and retention are one of the biggest pain points in SMB. Solutions addressing the same across hierarchy levels have a massive opportunity among SMBs and is expected to be an opportunity of USD 3.1 billion. SMBs are receptive to solutions that digitize entire workflow of their vertical. Given high adoption of smartphones among Indian SMBs, it is imperative for solutions to be fully operable over mobile interface. Greatest deterrent to adoption of solutions is requirement of high upfront investment. It is required to reduce the burden by offering pay-per use pricing.
To ensure last mile reach creation of FMCG reach of solutions across geographic barriers and experimenting with on-boarding entities such as cyber cafés operators, and ticketing agents, as partners is a necessity. According to Arvind Rawat, engagement manager at Zinnov, “It is estimated that an additional USD 1.1 trillion will be contributed to the GDP due to adoption of digital technologies by SMBs in 2020 with a 75% of overall enhancement in SMBs performance.” Rawat also added that “168 million additional jobs will be created to power incremental output aided by digitization
Zinnov provides consulting services for the establishment and management of offshore captive centers for Engineering & IT, BPO, and knowledge process based services. Zinnov offers offshore advisory services; and assistance with conducting market analysis, exploratory research for expansion and business analytics. Zinnov also provides business consulting and support services, which include customized consulting engagements, operational dashboards, industry trends and best practices monitoring, and policies in the areas of technology & IT services, business and corporate services, growth strategies, expansion initiatives, branding, and process improvements. Zinnov serves clients in Software, Automotive, Telecom& Networking, Semiconductor, Consumer Electronics, Storage, Healthcare, Banking, Financial Services & Retail Verticals in US, Europe, Japan & India. Zinnov was founded in 2002 and is head quartered out of Bangalore. The company has locations in Houston, Silicon Valley, Bangalore & Gurgaon. For any further media queries
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