A stronger ecosystem for SMEs increasing Digital India footprint

Increasing access to the Internet even in smaller towns and the rate of smartphone-led connectivity spreading across the country meant India was prime ground for a campaign like Digital India.

But end-users getting savvier and going online to be connected to services or making purchases isn’t the only way Digital India’s reach is growing.

With various B2B start-ups viewing the long undertapped SME segment as a huge opportunity, Digital India outcomes may beat expectations sooner rather than later.

There are reportedly more than 40 million SMEs in India. Start-up names such as Tolexo, Power2SME, Rubique and NowFloats aiming to move all kinds of B2B relationships and transactions towards full cycle digitisation, indicates more businesses are now online.

The more SMEs are connected to suppliers, buyers and financial institutions, the smoother transactions and fulfilments will be for enterprises. However, while industry and experts had known urban India alone wouldn’t fuel growth for the country, every stakeholder chasing the same piece of the pie would lead to redundancies. Different stakeholders taking on very specific problems to solve would, in theory, contribute to a stronger ecosystem for Indian SMEs.

Power2SME claims its mission is to “empower SMEs to enable the India growth story”. Crucially, the company intervenes in the area of pricing to aid SMEs.

R Narayan, Founder and CEO, Power2SME, says, “On our digital platform, we aggregate SME requirements. We help them procure raw materials from manufacturers at better prices. These SMEs are ₹5-80 crore size businesses. If on a purchase of ₹6 or ₹7 crore, there’s a reduction of 3 or 4 per cent, that’s big for the SME.”

SMEs typically also depend on supplier credit, while lending to SMEs is also a priority for banks. Narayan claims he sees an acceptance rate of about 76 per cent for SMEs on his platform compared with the general rejection rate of 80 per cent for SME borrowers in India. (Younger start-up Rubique – an online marketplace for financial products – is also in the arena aiming to help MSME borrowers find the banks or NBFCs to fulfil their credit needs).

Digital India won’t be about online payments alone. Well before the Centre’s demonetisation move in November, Digital India had already been playing out with start-ups and large enterprises aiming to win SME clients.

NowFloats, for example, sees itself as being in the business of “getting SMEs discovered”. Set up in 2012, NowFloats, as a lead generation platform, helps prospects find the SMEs they are interested in.

Nitin Jain, Co-founder and Chief Operating Officer, NowFloats, admits he had early doubts.

“Our fears were that SMEs weren’t a paying segment in India. But there was also a huge opportunity with them. If we’re talking 40 million SMBs, we haven’t touched many yet,” he says, claiming that the NowFloats platform serves more than 2.3 lakh SMEs, with about 80 per cent of them being paying clients.

Because a digital presence is no longer an option, the NowFloats platform saves the time and effort businesses may have to expend in creating a website, generating leads and converting them. Backed by “responsive content and location-based technology”, NowFloats aids offline and online discovery of businesses by bringing them online via SMS, internet and the NowFloats app.

Aided by machine learning and Artificial Intelligence, the platform also updates domain-relevant and localised content specific to its clients. All of this reportedly gives the platform more than seven million unique visitors a month.

(Aeroleads, a newer lead generation platform, is also reaping traction among SMEs in India. Reportedly, 70 per cent of its 7,000-odd customers are SMBs, although a majority of these are US-based).

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