Digitally Connected Small Businesses Are More Successful; Grow 27% Faster Than Offline Businesses: Deloitte-Google Report


Digital Businesses

Last year in August, PM Modi announced the Digital India vision, and how it will help India to compete with developed countries, and make our lives better. Since then, we have shared some interesting news related with the power of being Digital; the way rural India is being reshaped and how Internet is being penetrated deep into the hinterlands of India.

However, there always had been a bit of speculation regarding the effect of ‘Digital’ on small scale businesses in India. The small scale brick-and-mortar entrepreneur, who is managing with 3-5 employees, having turnover of less than a million INR yearly; how will he get benefitted from Internet and Technology?

Google and Deloitte India has researched into the implications of being Digital for an SMB, and the report throws some interesting insights. At a time when SMBs contribute 8% to the national GDP; when there are roughly 130 million people employed by 65 million small scale businesses across India, and 50 million new jobs (non-agriculture based) would be created by these small businesses in the next 3 years, then it becomes important to understand the impact of being digital; or lack of it.

SMB Digital1

In the report, the term ‘offline’ refers to those businesses, which does not have any access to Broadband Internet; and does not use technology for their day to day operations.

Some highlights from the report:

  • SMBs which are Digital, have experienced 27% more revenue growth, compared with offline SMBs
  • Digitally connected SMBs are 4.5 times more innovative in creating new products or services
  • Employees at an SMB which uses technology are 6 times more satisfied
  • They create 84% more employment opportunities, compared with offline SMBs
  • SMBs which are advanced users of digital tools and Internet, have hired 11 additional employees, compared with offline businesses.
  • More than 80% of the owners of the surveyed SMBs use social media; but less than 20% of them have listed their business on any online search engine like Google or Bing
  • Under B2B section, 33.5% of the surveyed SMBs are offline; whereas under B2C section, 26.7% of them are offline.
  • Those SMBs which showed advanced level of Digital engagement, had 19% annual growth on an average; whereas offline SMBs had 8% of negative growth

SMB Digital2

  • Those businesses which are basic level users of Digital platform (emails, social media) have 13%v more chances of exporting their product/services to International clients. If they are advanced users (Cloud technology), then this probability goes up to 65%.

SMB Digital

The report does mention few challenges of adapting digital platform, especially for those businesses which are traditional, family owned and stuck with age old practices.

Internet first came to India in 1995, and Windows bases computers had arrived by early 1980s. However, the push for being Digital which is being observed in the last 12 months has been unprecedented to say the least.

The report by Google-Deloitte once again confirms the notion that this transition from being offline to online has become crucial for SMBs now, and rather than a luxury, it has become a necessity now.

You can access the full report here.

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