Small and medium businesses (SMBs) play a pivotal role in a developing country like India. It has been estimated that India is home to 48.8 million SMBs and they contribute 17% to GDP of the country today. It is largely dominated by micro scale businesses, comprising 95% of the landscape, followed by small scale businesses comprising 4.8% and the rest 0.2% by medium scale businesses.
SMBs in India face pressing challenges such as expansion of operations as well as retaining their existing consumer base. Lack of capital further
affects their maneuverability and inhibits innovation. On the other hand, mobility in everyday life has resulted in the world evolving towards a truly connected place. Personal use of mobility is already visible with people, especially youth relying on mobile devices as their primary communication tool. According to reports, smart phone users in India will explode by nearly 300% to 382 million by 2018 with most of these users accessing internet through their phones.
This transition creates challenges as well as new opportunities for business. Indian companies spent R3 billion ($49.9 million) on mobile ads last year, and the market is projected to expand 43% this year, according to the Mobile Marketing Association. Mobility provides new channels to businesses for active engagement with their existing customers as well as reaching out to potential customers. The opportunities are more profound for the small and medium scale business in India as SMBs employ nearly 40% of the population in India. With multiple pay-as-you-go business models dominating the landscape, I believe that technological innovation which could earlier be afforded only by bigger players is available to SMBs.
SMBs need advanced technological solutions which optimally utilise their resources thereby increasing their productivity and efficiency. Such solutions will have a larger societal impact apart from the economic benefits they ensue. In fact, the impact of adopting mobility solutions is already evident. To illustrate, as per the 2014 AT&T-SBE Council Small Business Technology Poll, globally small businesses are drastically cutting costs and saving time with the help of mobility—to the tune of nearly 2 billion hours and $67.5 billion on average each year.
SMBs should adopt mobility solutions to foster growth and enhance consumer experience.
Data analytics: Analyses of data on the basis of consumer behaviour patterns plays a vital role for companies to understand the need of their consumer and thereby realigning their marketing strategies.
Cost optimisation: It is imperative for SMBs to ensure maximum output with minimum investment. Small business need to optimally utilise their resources for enhanced productivity Personalised business applications: With the smartphone boom, mobile applications have become a standard business tool. SMB players need to focus on adopting specific applications which cater to their business needs and enhance operational excellence.
Expansion of online presence and enhanced reach: SMB players need to utilise services such as email, messaging, CRM, social media to ensure they reach out to their consumers and potential consumers.
As online market places and m-commerce grow in sophistication, they give opportunities to local retailers to boost local economy and gain attention of customers worldwide. Since small retailers lack the resources and skills to enter the global markets, such solutions plug the void and create a level playing field for the disadvantaged SMB segment. For example, Ava.ph is an e-commerce platform that focuses primarily on the Filipino market offers a wide variety of products by local brands that aren’t available anywhere else.
In India, mobility drives the holistic strategy of e-commerce success stories like Flipkart, Snapdeal and Jabong. Snapdeal has witnessed a 25-fold growth in mobile based transactions and more than 50% of their sales come from mobile devices in the current year.
Another strong development for upsurge of mobile-based payments is the greater adoption of mPOS (mobile point-of-sale) solutions. As of April 2014, India has about 418 million credit/debit card holders as against a mere 1 million POS terminals. Modern mPOS solutions are convenient to use, ensuring the SMBs to convert their mobile into a POS device and drive transaction volumes by accepting cards anywhere, anytime. This would help the SMBs to increase sales, add value to customer experience and take small retailers community to a cashless route.
To conclude, the SMB industry has the potential to be the largest growth driver for the economy. The players need to move beyond traditional practices and adopt solutions which would give them the required impetus to script greater success stories in the coming years.
Manoranjan ‘Mao’ Mohapatra
The writer is CEO, Mahindra Comviva