How small businesses can shape India’s economic recovery

2021 will fuel the next decade of entrepreneurship, innovation, and small business growth, says Archana Vohra, Director, Small and Medium Businesses, Facebook India

How small businesses can shape India’s economic recovery

Wednesday February 10, 2021,

6 min Read

On 30th January, 2020, the World Health Organization declared COVID-19 to be a pandemic. The weeks and months that followed changed the world forever, and a year later, we’re still learning, evolving, and adapting. While 2020 will go down as one of the darkest years of recent times, I believe it’ll also come to stand for a time when businesses and communities came together to show remarkable amounts of innovation and determination. 


And this is particularly true for the small business community that personally inspires me every day as I take on the privilege to work for them with Elizabeth Edwards quote on replay in my head: “She stood in the storm and when the wind did not blow her way, she adjusted her sails.


The small business community was among the first and the hardest to be hit by the COVID-19 pandemic. Yet in the face of so much adversity, they demonstrated unfathomable resilience. At Facebook, we’ve remained committed to enabling small businesses to reinvent themselves by moving online - many for the very first time. Every day we see amazing examples of small and medium businesses (SMBs) using digital, and more specifically the Facebook family of apps to pivot, and make a new start, and grow through this particularly challenging time. As an ode to these small, but mighty, businesses, we recently launched a new campaign that celebrates their nayi shuruaat - whether in moving online or finding new innovative ways to reach customers.

We have also consistently stayed connected with our SMB customers - The State of Small Business Report, an ongoing research collaboration between Facebook, the Organisation for Economic Co-operation and Development (OECD), and the World Bank showed us that 51% of operational SMBs on Facebook India reported they were making at least a quarter of their sales digitally. This is substantial considering that there are more than 60 million small businesses across India. 


The deepening digital acceleration will also mean that we will see stronger, greater, and a more inclusive digitisation for small businesses across India. 


Here are some of the key small business trends that we’re likely to see in 2021:

Small businesses will continue to move online

According to a joint report by Boston Consulting Group (BCG) and Facebook, digitally influenced purchases had increased by up to 15 percent to -20 percent for key categories in urban consumers in just three months after the pandemic. This trend is likely to strengthen, and we’ll see more small businesses move online this year. In fact, the report by Facebook, OECD, and the World Bank also showed that nearly a third of operational SMBs on Facebook India said that the proportion of sales they made digitally has increased compared to before the COVID-19 pandemic. 

More small-town businesses will tap into digital to expand

The digital acceleration has made small businesses in small towns realise how seamlessly they can reach customers elsewhere in the country. A couple of months ago, we announced a unique partnership between Instagram, Kareena Kapoor Khan, and an Ahmedabad-based small business, myBageecha that sells a range of gardening products and services. They have used Instagram to not just develop a passionate community of plant lovers but also to reach new, potential customers across India and accredit a 3x growth in their sales to Instagram. Story@Home, a Vadodara-based home furnishing and decor business has been using the Facebook family of apps 4x more during the pandemic, and has achieved 1.4x sales numbers compared to what they were clocking in pre-COVID times.  

Virtual experiences, innovation, and mobile will continue playing a key role in growth

A study by YouGov shows that Facebook and Instagram together influence nearly 80 percent of Gen-Z and Millennials’ festive shopping. In 2021, I foresee a greater focus on virtual and mobile-led experiences with video, AR, and messaging playing a critical role in engaging the consumer and driving purchase. Take the example of Karagiri that sells handcrafted silk sarees and launched their Diwali collection first on Instagram before rolling it out on their website.  

A stronger small business ecosystem

India has a thriving startup ecosystem, a burgeoning internet population, and a strong entrepreneurial zeal that is getting fuelled by digital. This will accelerate a bunch of exciting trends such as innovative and scalable ideas coming out of India. The remarkable story of White Hat Jr., and how they grew into a $300 million company in just 18 months is testimony to this. Very few people know that a large part of their growth came from leveraging digital, and advertising on Facebook and Instagram. As more businesses move online, they’ll also need stronger skilling and support to ramp up. Facebook already contributes significantly to this through a host of free learning, tools, and resources. We recently launched an India-focused SMB Learning Guide to help businesses seamlessly move online.


In 2021, we will also see the development of a stronger community amongst small businesses with many SMBs coming to support and lift others. During COVID, Okhai, an organisation dedicated to creating livelihood opportunities for Indian artisans by enabling them to sell handmade women’s apparel transformed itself into a marketplace with 35 non-Okhai collectives and many other artisans retailing through them. Another example is that of Ithaka, which went from being a community-driven travel planning and social commerce platform to a community initiative to save small local travel businesses from COVID.  

Home-based small businesses and women led-businesses will continue to rise

Digital has made it simpler to start and scale a business while helping many overcome social barriers. We expect to see a new wave of home entrepreneurs and women-led businesses to emerge on the back of the reach, ease, and flexibility that digital provides. 


With small businesses forming 30 percent of the GDP, we know that their revival will be critical to the economic recovery of India. With a massive digital acceleration over the last one year, we also know that a large part of India’s economic recovery will happen on the back of digital. I have no doubt in my mind that 2021 will not just define our recovery from the pandemic but also that it will shape the coming decade of entrepreneurship and innovation.

Edited by Anju Narayanan

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