SMEs have played a pivotal role to country’s economic growth where it provide employment to around 120 million persons and contribute around 46% of the overall exports from India. Therefore, understanding the importance of SMEs on the socio-economic development of India, we are proud to bring you an entire week on the study of SME. Named it as “SME Week Series”, it will be extremely useful for all those working in the space of SME, Retail, Manufacturing Unit, Association and other relative sectors to learn innovations and new approaches in running a successful SME. Today, in our 1st part of the “SME Week Series”, we bring you the upcoming SME trends of the year where it flourishes amidst a challenging environment. SMEs as a driver of socio-economic development of the country is set to see certain trends, some tailing events and some, outcome of inevitable changes.
- Rise of SME focused B2B eCommerce
The advent of advanced technology is introducing newer channels for businesses across several sectors. This is particularly true for B2B eCommerce firms focused on the Indian SME sector. The presence of innovative technological platforms is bringing on board a rising number of small players including the neighborhood kirana store. This is a positive situation for all involved enabling smoother transactions, procurement of raw.
- Financial Credit to SMEs
A major constraint in the growth of the SME sector has been non-availability of easy finance. Not all small and medium enterprises find favor with traditional banks when it comes to lending courtesy lack of experience, absence of collaterals and infrastructure, poor financials, and small ticket size. Given their significant online presence, several modern fintech players are making it convenient for the SMEs to receive loans. Apart from them, other financial institutions are focusing on making loans available to SMEs required for their growth. SIDBI is one of the financial sectors whose vision is to meet financial and developmental needs of SME sector to make it more dynamic and effective. Similarly, ICICI bank is also offering several schemes for SMEs and empowering them to make their business more profitable and efficient by utilizing their existing resources.
- Government initiatives, a major boost
Government understands the urgency for providing a fast paced growth to MSME sector and therefore, 2017 will further witness strengthening of current policies and introduction of new initiatives to improve the business environment for MSMEs. The most awaited reform in 2017 is implementation of GST bill. Implementation of GST Bill is expected to benefit MSMEs not only with simpler tax structure but also with aspects such as improved technology adoption in order to comply with GST system.
- AI and Chatbot
The growing trend of having consumer and retailer on the same platform is serving small and medium businesses a way of interacting consumers and fetching higher revenues. Use of AI-based chatbots and applications will help SMEs raise higher sales revenue on web. Global giants like Google and Facebook has come up with their own set AI-based interfaces to help SMEs grow consumer engagement.
- Impact of eCommerce
SME’s will be actively using more of eCommerce platforms for business expansion. A study by KPMG finds 85% of SMEs already using eCommerce believe it is a cost-effective channel for sales growth. It also claimed that SMEs actively practicing eCommerce benefit from 51% higher revenues and 49% more profit. They also have a 7% broader consumer base than SMEs who are still offline. ECommerce platforms can help SMEs reach a pan-Indian customer base. Besides, amalgamation of m-commerce and eCommerce will further boost SME sector in India.
- SMEs Creating Jobs
SMEs will be responsible for creating bulk of employment in India. SME sector’s ability to create jobs, especially in the rural sectors, is a key positive trend for the Indian SMEs who are estimated to add over 1.3 million jobs per year. The SMEs are contributing to an impressive manufacturing (18% YOY) and service (34% YOY) sector growth rate. Conclusion 2017 will be a path-breaking year for SMEs with technology inclusion and implementation of long awaited tax policies.