24 June 2017

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The Online Attraction

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When anyone calls a typical Indian small business owner – a less tech savvy professional, better retract the statement! A recent AMI-Partners report made it clear that the SMBs in India are seemingly getting active towards technology and Internet.

Online advertising is still at a nascent stage within India SMBs. According to the study, less than 6% of PC-owning India SMBs (companies with up to 999 employees) advertise online – indicating a significantly high growth potential. A majority of India SMBs use traditional media and AMI expects them to shift their advertising dollars to more targetable and measurable media over time. As a result, online advertising spending by India SMBs is anticipated to grow at a CAGR of 27%.

Look at the number, projected by the analysts, this also shows that there is a huge undercurrent towards the growth of technology adoption in next 12 to 18 months among Indian SMBs.

However, two factors have contributed exponentially towards such findings. Firstly, the India SMBs have positive growth expectations regarding e-commerce revenues. And over a period of next one year they are planning to get 50 percent more stringer through sales generating from e-commerce.

Secondly, a huge number of these SMBs are yet to adopt online media – only a marginal proportion of India SMBs currently advertise online. As India SMBs become more aware of the effectiveness, measurability and predictability of using online advertising to reach the target audience there is likely to be a large influx of first-time buyers being influenced by this medium. A huge opportunity exists for India SMBs to reach their desired financial goals by optimising their web presence and capabilities – this still remains a somewhat unexploited market.

Authenticating this finding, Sawati Sasmal, Senior research manager, AMI-Partners – India says, “Presently, a typical SMB engaged in e-commerce derives over 4% of its annual revenues via online sales and expects online sales to grow by an additional 6% over the coming 12 months,” Moreover, approximately a third of India SMBs are planning to prioritise or improving of e-commerce capabilities next year. “This growth will be supported by matching investments in online advertising,” Emphasising on small businesses, Sasmal further added, “Since the majority of India SMBs, especially the small businesses, generate a large proportion of their revenue from the local market, they still rely on traditional media like telephone directories and newspapers to reach their customer base.” However, electronic media can grow their revenues from this space significantly by actively reaching out to India SMBs, Sasmal also indicated,  “India SMBs can then leverage this unique opportunity to showcase their products beyond any geography.”

However, another factor that is affecting this prospect, is the changing broadband scenario of India. With the advent of 3G and Internet tariffs getting more affordable specially for the small business and SOHO segment, stakeholders can further foresee online growth rapidly. E-Commerce will grow, dependency on internet will also grow at the same time mobility of workforce is also expected to touch a considerable size in the SMB segment. All these aspects collectively indicate that online is the trend to be watched in the coming years in the Indian small and medium sized businesses.

 

The Online Attraction
 

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