Based on a study conducted by PayPal, the digital payment service, 52 percent of Indian MSMEs reported improving their business following the outbreak. In addition, more than a quarter who were selling products on social media began doing this during the attack, and over half of those interviewed SMBs believed that it was the primary driver of growth over the past twelve months. In addition, 66 percent of India’s MSMEs said they had joined social media after watching their competitors use it.
PayPal has conducted the “MSME Digital Readiness Survey” collaboration with Edelman Data and Intelligence. The study aims to discover how Indian MSMEs have changed to the pandemic by adopting a digital-first strategy and taking advantage of the global market and their main objectives to increase their scale.
This survey examines the impact of COVID-19 on small-sized businesses that have an internet presence. The survey is conducted from October through November 2021. The results are based upon interviews with 250 decision-makers from India’s medium and small enterprises with an annual income of five to 250 million.
Following two full years of outbreak, the study revealed that 52% of small companies experienced positive effects on their businesses after the economies began to recover. Twenty-nine percent of MSMEs reported that the business climate in India was more favorable in online sales, and for 31%, the potential for cross-border business was exciting.
The digital revolution continues to be embraced by consumers to help MSMEs.
There has been a change in the behavior of consumers triggered through the closures. This has opened the way to shopping online from stores. MSMEs have seen an increase of 65 percent in the number of online purchases made by customers, and more than 80 percent said their customers are more open to different payment options. The convenience, accessibility, and use of digital possibilities have led to 51 percent of small and medium-sized enterprises experiencing more spending by existing customers. In comparison, 46 percent observed an increase in repeat purchases.
A well-constructed online presence is an important goal for the future.
MSMEs have shown remarkable endurance and determination to overcome COVID-19’s weaknesses by using the digital platform to their advantage and expanding their presence on the internet. At present, 66 percent of MSMEs make use of social media as a selling platform, followed by the marketplace (62 percent) as well as owned by the company, i.e., application (61 percent) and their e-commerce site (54 percent) and third-party platforms for e-commerce (54 percent).
In contrast to third-party platforms, companies’ channels usually give business owners more control, flexibility, and flexibility when selling online. In light of the changing the way consumers shop, companies are shifting their priorities and plan to establish an online store owned by the company. Corporate-owned platforms for engaging with online sales are at the top at 29 percent and 28 percent, respectively.
This is vital for Indian MSMEs since 49 percent of respondents are keen on creating their websites or apps. However, this autonomy can bring problems, notably the lack of technical knowledge. More than half of those (56 percent) who do not sell their products mentioned a lack of technical expertise as the main obstacle.
Social media is a significant growth catalyst for companies.
Digital is a powerful growth engine for Indian small-scale firms. Similar to Singapore and Hong Kong, social media is the most viewed seller on the internet. It was noted that 26 percent of people selling through social media started to do this after the outbreak and 56 percent of the surveyed MSMEs considered it an essential factor in growth in the past 12 months.
Although the user-friendly interface (67 percent) and the natural transition from selling for non-sale (67 percent) are the top motives to utilize social media platforms to market and sell, another reason that is worth accepting is the competition. Businesses are more competitive than it has ever been. Sixty-five percent of Indian MSMEs reported adopting social media following seeing their rivals do similar things.
In addition to being a fact that selling products on social media is very easy and can encourage healthy competition, it has also helped companies understand their customers and educate them on social issues.
Around 100 percent of Indian MSMEs agree that trade across borders must be a top priority for business in the next 12 months.
Cross-border adoption trading in India is relatively high, 64 percent of traders had embraced cross-border trading before the pandemic, and 35 percent of them did so during the outbreak. Of them, 86 percent of MSMEs that sell globally said they witnessed an increase in cross-border commerce during COVID-19.
Much of the success is due to the opening of new economies and positive reviews from the global population. 94 % of respondents believe the benefits of crossing borders expansion have made cross-border trade a vital business goal moving forward.
The advancement of technology is helping businesses expand far beyond the borders of traditional business.
MSMEs have outlined some issues that arise when making international trade, such as the high cost (74 percent), exchange-related concerns (31 percent), and concerns about fraud (30 percent). To combat these challenges, MSMEs have formed partnerships with online selling platforms from third parties developing their apps and websites, preparing their internal systems for selling online, and adopting the global payment system.
Digital payments and technology-based seamless checkout experience are among the areas of focus for Indian MSMEs.
As many Indian MSMEs adopt digital technology, investing in their digital transformation has become the top priority. 98 % of companies surveyed have expressed the desire to invest in developing more payment options. Of this, 95 percent are looking to create new payment methods, and 90% are looking to improve payment methods using cards. Then, there is optimizing payment services to accept digital wallets, such as PayPal (70 percent).
A growing area of interest for small-sized businesses is the experience at checkout that they provide customers—around 40 percent plan to invest in improving the process of payment and checkout to boost sales. The main reason for doing as stated by small enterprises, is to accept payments from new channels of sales online (60 percent), integrate loyalty programs (57 percent), and expand the use of unique, local payment methods for selling internationally (56 percent) in addition to other.
In the face of increased competition, companies are fighting for the consumer’s part of the wallet. Forty-nine percent of Indian MSMEs surveyed are planning to invest in technology to provide the best customer experience. An easy checkout experience can lead to increased customer loyalty and the potential to increase the number of customers they serve.