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Visit click.in, a general online classified site, and you will notice a host of enterprises that have posted ads, inviting franchises for play schools, business partners and so on.
Enter virtual reality platforms such as Secondlife and the Indian version, Gojiyo.com, and you will find several Indian SMEs have taken the bold step of test marketing their products here to gauge reactions before they launch them offline in the real world.
On Facebook, cake shops and florists are thriving, generating leads and instantly converting them into buys.
All these examples reflect the findings of two recent studies which show that more and more small and medium enterprises (SMEs) in India are getting savvy about using the Internet to market their wares.
A study by Google India to understand usage patterns of the online medium among the SMEs in India showed that over 57 per cent of the SMEs surveyed used their Web site as a sales channel and got direct business leads from their Web site.
Meanwhile, in its Vision 2020, Implications for MSMEs report for FICCI, consulting firm Grant Thornton has quoted an Internet and Mobile Association of India (IAMAI) survey that says 73 per cent of MSMEs (micro, small and medium enterprises) in India have their own Web sites. And, 99 per cent of MSMEs use online B2B (business to business) marketplaces to generate business.
While these reports sound encouraging, FICCI's Sanjay Bhatia, who chairs the chambers' MSME committee, believes that ICT exposure is still inadequate. With over 35 million SMEs in the country, producing Rs 20 lakh crore of goods and services every year, there's much more that can be done online, he feels.
“Having a Web site is one thing. But how you market the Web site, how it shows up on searches, is it optimised, are you on the right platform — this kind of knowledge is still lacking,” says Bhatia.
Sridhar Seshadri, Head of Online Sales, Google India, admits that the absolute number of SMEs with an online presence is very low compared with actual businesses in India. “But, we're pleasantly surprised to see increasing understanding amongst Indian SMEs to use the Web for business growth,” he says.
A cost-effective move
Sanjay Bhatia feels that ICT exposure can help SMEs in two ways — one, in terms of marketing, and second in terms of introducing operational efficiencies in running their business.
Spends by SMEs on the Web are certainly rising. The IAMAI report says 45 per cent of the total annual marketing budget of the MSME companies in India is now spent online. The Google India report says that SMEs with marketing spends of between Rs 25 lakh and Rs 70 lakh per annum tend to spend higher on the online medium and rely less on traditional media such as print and television. But majority of the spends (43 per cent) comes from SMEs who spend between Rs 12 and Rs 25 lakh on advertising on an annual basis, reflecting the low-cost benefit of the Internet.
“Targeted advertising through social networking and blogging sites have provided the right platform for a number of companies to reach out to its prospective customer base more cost-effectively,” points out the Grant Thornton document.
In the Google survey, 785 SMEs (owners or marketing heads) were interviewed across India, including Mumbai, Delhi NCR, Ludhiana, Kolkata, Bangalore, Chennai, Coimbatore, Hyderabad, Ahmedabad, Surat, Cochin, Pune, Nashik and Nagpur.
Going forward, Google India's bet is that SMEs from Retail, Apparel and Travel & Tourism sectors will be the biggest contributors to online advertising in the future while search engine advertising and online classifieds, as a category, will see an uptick across industries.
Right now, the study finds that SMEs from Services, Manufacturing and Export vertical are the most active in online advertising with over 65 per cent using search engine marketing.
But Bhatia feels much more needs to be done to create awareness on ICT's benefits among SMEs. “In terms of marketing, yes, the SMEs are now using digital tools, but in terms of using ICT to become more efficient — be it SAP systems or other tools — awareness is still lacking,” he says.
Yes, costs are a deterrent, he agrees, but this is certainly an opportunity area for the IT firms to create tools that are locally relevant. “We are looking at these kind of programmes, taking along solutions providers and making them interact with different kinds of clusters or industrial estates,” he says. “With GST (goods and services tax) set to come in, and all of us looking at how everybody integrates with this, creation of IT tools could be of help,” concludes Bhatia.
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