How technology has truly enabled digitisation of SMEs and can help India reach $5T economy goal
The current business landscape across the globe is being led by digital technologies that are transforming the way systems and processes work.
Business concepts and models have been revolutionised as a result of the introduction of technology. While no business could safeguard themselves against the pandemicthe smaller businesses were impacted far more.
To stay afloat, small and medium businesses began to embrace technology as a business enabler. A study by-KPMG showed that digitally-empowered SMEs have about twice the revenue growth projections in comparison to offline SMEs. In hindsight, the lockdown acted as a catalyst to increase the pace of digital adoption in India, especially for SMEs. By leveraging technology, small businesses were able to speed up, simplify, and automate various everyday tasks, thereby truly enabling the digitisation of ‘Bharat’.
According to research done by the Boston Consulting Group (BCG), SMEs that adopt new technology have 10 points higher job growth and 11 points higher revenue growth than low tech SMEs. Small businesses, especially brick-and-mortar stores, bore heavy losses during the lockdown because of unsold inventory, negligible sales, and lack of in-person traffic due to social distancing. They had no option but to pivot their business models online. By adopting digital technologies and integrating them into their daily operations, SMEs were able to give their customers, local community and partners the best opportunity to survive as well as thrive during adverse times. Here’s how:
Ration stores embraced tech
The pandemic changed the way small businesses operated, forcing them to embrace technology to move online. Ration and household purchases, which earlier remained a heavy in-person experience, exhibited new digital behaviour. Due to dwindling footfalls, store owners had no option but to shift online.
The adoption of UPI, phone wallets, card payments, and other digital money increased as the popularity of currency notes fell down. UPI, in particular, acted as a game changer and almost doubled in 2020, both in terms of volume and value. UPI saw its growth being driven by larger adoption of digital payments across categories, along with its usage in QR code-based payments.
Integrating tech with daily business activities several small business owners started using, , and to digitise bills, manage finances, and customer communication, among other business operations.
Home service businesses became popular
Companies like Urban Company and Housejoy have created a niche for themselves in the home service marketplace. These companies operate as a master app, bringing together services that include but are not limited to grooming, beauty services, repairs etc. Keeping in mind the general skepticism around physical distancing, these in-demand apps upped their game by heightening their safety and hygiene standards.
According to a report by UrbanCompany, there was a rise in demand for repair services during the lockdown as consumers were increasingly looking to extend the life of their existing white goods instead of buying new ones. The report also mentions thatacquired 33 percent new customers during the coronavirus-induced lockdown.
Restaurants started online food delivery
The lockdown was the harshest on the hospitality and travel industry. When the lockdown restrictions abated but the scepticism around going out remained, restaurant owners started listing themselves on Zomato and Swiggy, making both the delivery apps the saviour of bad times.
With the help of food delivery apps, food outlet owners were able to expand their reach to a large number of customers, do customer tracking, provide better delivery, and service management.
As per a report by Zomato, the food delivery industry has largely recovered, with the overall sector clocking around 75-80 percent of pre-COVID GMV.
Teaching/training moved online
Online education through edtech platforms has been around much before the pandemic. However, the global crisis became a major catalyst in enhancing the teaching process.
Individual tutors, educators, coaches, authors, speakers, and trainers who used to teach in person figured out ways to list products online. Several platforms also empowered content creators, trainers, institutes and educators to create, market, and distribute their courses through a secure, white-labelled platform.
In 2020, SMEs stood out as the key driver behind the economic development of our country. This sector has the potential to spread growth and create jobs and is correctly referred to as the backbone of the economy. The synergies of integrating SMEs with technology will enable India’s growth, increase the digital footprint, and fulfil the goal of India’s $5 trillion economy.
Edited by Teja Lele
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)