The SME sector, also known as the ‘Engine of growth' for India, has scaled significantly over the years on the back of increasing awareness, digital advancements and better opportunities that have encouraged many entrepreneurs to offer unique innovations and emerge as success stories. Despite several challenges in the form of infrastructural constraints and lack of access to formal credit, they are thriving and standing tall to shoulder the responsibility of India's economic and social development.
Today, the sector has mastered manufacturing competencies, reduced regional discrepancies, secured the distribution of wealth and is contributing to 69% of employment in India. With the growing penetration of technology into the mainstream ecosystem, these SME industries are now poised to bring the convenience of digitalization to the masses.
The Indian economy is expected to be a $5 trillion economy by 2025, and SMEs are making the major contributions towards this goal. This year, the sector witnessed a 60% boost in business via a mobile app which is clear proof that the tech-savvy way of business has been well received by the SMEs. This has been primarily driven by online businesses opting for bulk buying and selling which is easier on their pocket. Further, the surge of fintech players is easing out the loaning process with special focus on the online platform has accelerated the growth of this sector, especially in Tier-1 and Tier-2 cities.
While this has resulted in the improvement of the individual economic scenario in those regions, the success of SMEs in these areas is eventually inspiring many ambitious individuals to capitalize on the host of prospects available in the markets beyond, mainly in tier-3 and tier-4 cities. Many have now started to invest in small businesses within tier-3 & tier-4 cities, and in the process, they are allowing such regions to develop at an exceptional rate.
So what is triggering the growth of SMEs in tier-3 & tier-4 cities?
Since the small enterprises have already exploited the markets of Tier-1 and Tier-2 cities leaving near to no opportunities untapped, new businesses hoping to enter this space are finding it tedious to survive in the long run. Tier-3 and tier-4 cities that have been hardly explored, are increasingly becoming noticed by ambitious entrepreneurs in a bid to create a successful business in an uncluttered space. These new markets are proving to be a boon for several small business owners, giving them opportunities to emerge as prominent market leaders when the time is just right.
Moreover, with the increasing internet penetration in the tier-3 & 4 regions, entrepreneurs are able to explore the lucrative markets without having to worry about geographical limitations.
Furthermore, it is also helping small businesses connect with manufacturers, exporters, suppliers, and buyers to generate value from unlimited online trade opportunities and buyer enquiries via dedicated online platforms. Meanwhile, an improvement in access to financial assistance and payments is also reassuring many SME owners to scale their businesses without any hassle.
Launching, sustaining and growing small or medium enterprises is not an easy task. Entrepreneurs and their teams are required to adapt and adopt at a fast pace to give their business a competitive edge.
Here are some interesting trends for the SMEs in 2019 that are touted to play an important role for their smoother growth journey towards global success:
The rapid increase in smartphone users in every part of the country is contributing majorly in accelerating the growth of m-Commerce in India. Thus, apart from web-based technologies, new enterprises must simultaneously adopt mobile-based technologies to expand their business across multiple platforms, steering in a new trend of Mobility-Analytics-Cloud & Social (M-A-C-S). This gradual shift from Social-Mobility-Analytics & Cloud (S-M-A-C) system is expected to be one of the most trending aspects within the Indian SME sector in 2019.
Lead Management capability
Small and medium businesses actively look for newer business opportunities and are eager to leverage various platforms and digital channels for getting customer leads. While they end up splurging a lot on lead generation, they struggle to manage and keep track of them, which leads to losses. By adopting lean CRM solutions that are economical, easy to control and mobile-friendly, they will be able to manage these leads and their customers effectively.
Every customer is crucial for an SME. After all, their ability to acquire new customers is often limited due to their size and resources. This is precisely the reason why in the upcoming years, they will try to have an edge when it comes to customer service and pay extra attention to each one of them to hold their attention. SMEs will stay acquainted with them and their individual necessities to roll out customized solutions.
Cyber Security and Customer Data Protection
Since, a 2018 Data Breach Investigations Report by Verizon stated that 58% of all cyber-attacks target small businesses as they are easier to penetrate, SMEs will now deploy solutions with cybersecurity in mind. They will pay more attention to data encryption and authentication from the client-side to avoid any data breaches.
Personalized Marketing techniques
There is a lot of data available about customers online that are now available for use by small businesses. This has allowed companies to run targeted and relevant marketing campaigns on a large scale. Since, almost all the businesses today are using social media to reach out to their target customers, SMEs too will have a better chance of building customer loyalty if they get in touch with their customers through platforms like WhatsApp, Instagram and Facebook etc. However, they must ensure that their message is effectively engaging with the customers in a personalized and meaningful way.
By adopting these trends, SMEs are likely to make the most of the many opportunities that 2019 will throw their way. The market will be ripe in the New Year for focussed and visionary businesses to make their mark and it's only through a combination of dynamism, agility and competitiveness that any SME business will be able to survive and thrive in a high-potential market.
The author is Founder & Director at Exporters India.