UPI ruled digital payments, Google business bolstered online selling in 2021: NeoGrowth survey

NeoGrowth Credit, a digital lender serving under-banked SME businesses, recently released the survey on ‘Digital Adoption Trends Among SMBs’. The survey indicated that about 66 percent of small and medium businesses (SMBs) across India have migrated to online sales.

SMBs adopted Facebook, Instagram, WhatsApp

The survey found that around 77 percent of SMBs in the apparel segment sold online, while the SMBs in mobile and accessories and food and beverage (F&B) selling online stood at 73 percent and 67 percent  respectively.

The survey also revealed that 81 percent of SMBs in Mumbai sold online. This was followed by 66 percent SMBs in Bengaluru and 63 percent SMBs in Hyderabad selling online on different platforms. Facebook or Instagram remained the most popular platforms across cities.

Google Business (35 percent), WhatsApp (13 percent) and Facebook or Instagram (7 percent) were the top three digital platforms where the SMBs had their listings for discovery. Interestingly, while 30 percent of SMBs had an online presence, 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 percent), followed by Bengaluru (13 percent), and Delhi (8 percent). Facebook and Instagram were the most preferred online channels of discovery especially by apparel, F&B, FMCG, pharmacies, and spas and salons.

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UPI was the most prevalent mode of online payments

Cash still ruled the roost with 70 percent 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 percent, followed by Bengaluru at 18 percent. Digital payments adoption was highest among SMBs in the petrol pump segment (32 percent), followed closely by mobile and 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 percent of SMBs. Only 6 percent used online food delivery apps, and over 35 percent did not deliver at all. SMBs in Delhi showed the highest preference for delivery through their own staff, whereas delivery through online apps was prominently seen among SMBs in Bengaluru, Mumbai, and Hyderabad. 

Scope for SMBs to digitise operations beyond GST & IT filing

GST and IT filing was the most popular business operation to be digitised by 67 percent SMBs, followed by billing and accounting and stock management. Digital stock management was popular among SMBs in Mumbai, other than GST and IT Filing, while SMBs in Kolkata, Hyderabad and Bengaluru showed a high preference to digitise their billing and 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.

The survey was conducted from February to 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 parameters including online selling, digital payments, as well as,

• Digital discovery — evaluating SMB's online discoverability on different platforms
• Digital delivery — evaluating businesses' partnerships with delivery platforms, online marketplaces, or delivery through their own digital order fulfillment model
• Digital operations — assess use of different digital tools/ platforms for bookkeeping, bulk ordering etc
• Digital customer engagement — leveraging social media, online feedback forms, campaigns, etc. to monitor customer satisfaction

The survey saw participation from SMBs in multiple industries including food and beverage (F&B), mobile and accessories, apparels, groceries (FMCG), pharmacies, spa and salons, petrol pump segments. Around 93 percent of the SMBs surveyed had an annual turnover of less than Rs 1 crore — out of these, 69 percent had a turnover of less than Rs 50 lakh. Approximately 7 percent of the SMBs in the survey were owned by women.

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.”

Talking about diGibizz, Arun said that they launched it a year ago. It connects 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,” he adds.