New Delhi: Indian SMBs are leveraging digital technologies across business processes, driving top line growth, maximizing output and deriving cost efficiencies; powering India into the future and 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:
· Engineering Product for SMB use
· Optimum pricing to ease SMB adoption
· High Impact outreach enabling large scale
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.”