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MSMEs adopting digital marketing are helping

India recover faster

Arnab Mitra

Published on : 11 Jan, 2021, 11:28 am

The Covid-19 pandemic has forced small and medium companies to adopt
digital marketing tools to stay alive. This is facilitating a quicker-than-
expected rebound in this sector, which accounts for a significant chunk of
GDP, employment and growth.

“This is indigenous innovation at its best. I have always maintained that the
Indian tech industry can be globally competitive in all aspects and Digiboxx is
such an example. It ticks all the rights boxes for India Inc’s needs but also fills a
gap for the MSME universe which is untapped,” said Kant.

Have you read?

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MSME reforms set the stage for big manufacturing boom

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Indian MSMEs in the age of AI

Redefining MSME limits will facilitate MNCs to relocate to India

MSMEs are aggressively adopting digital sales strategies

Traditional laggards in adopting new technologies, systems and processes, the

Indian MSME sector has aggressively adopted digital sales channels since the
outbreak of the Covid-19 pandemic in the country to keep itself ahead.

According to a survey conducted by Crisil, the Indian arm of global ratings

agency Standard & Poor’s, in November, this has helped a large number (60 per
cent) of small and medium companies in the country not only to weather the
Covid-induced storm and reduce the stress of their systems but also, the
remainder of cases (40 per cent), actually increase their sales significantly.

A Crisil report said: “The survey covered 566 micro and small enterprises with
annual turnover below Rs 25 crore ($3.6 million). A good 45 per cent of these

were micro enterprises, or those with revenue less than Rs 5 crore ($690,000).
The remaining were small enterprises with revenue in the Rs 5-25 crore
($690,000-3.6 million) range… These respondents were also more positive about
their near-term business situation compared with those that didn’t take the
digital route.”

Meanwhile, participants at a webinar organised last May by Deloitte and

Salesforce had pointed out that companies that adopt new technologies faster
can improve the effectiveness and efficiency of their marketing activities.

One of the major conclusions reached at the webinar was that companies that
move first and are more nimble in adapting to the new realities (of the post-
Covid world) are likely to be able to benefit significantly from the competitive
advantage they are able to wrest from this process of adjustment.

New trends

Companies, therefore, need to consider the following trends that are here to
h bi l d d
stay, the webinar concluded:

“Market from home: Deploy campaigns quickly from home, collaborate across
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teams and keep marketers engaged with apps

Engage customers with empathy: Listen to your customers, use real-time

data to better understand their current situation and needs

Personalise digital communications: Accelerate digital channel adoptions,

deliver the right message, to the right person, at the right time

Optimise budget spends: View unified marketing performance and make real-
time decisions to minimise the negative impact.”

The webinar largely corroborates the findings of the Crisil survey, which was
aimed at gauging changes in the level of usage of digital channels – including of
online aggregators, social media platforms and owned websites – by MSMEs
during and after the pandemic.

“About 29 per cent of the MSEs surveyed were using digital sales channels such
as online aggregators / marketplaces, social media, and mobile marketing

before the pandemic struck. That number has shot up to 53 per cent among
small enterprises and 47 per cent among micro enterprises as of November.
Despite their limitations, micro enterprises are not very far from small
enterprises in digital adoption. Also, many more are now saying they will take
the digital route soon. This underscores the fact that increasing digitalisation
enlarges the footprint of MSEs, helping them tap newer markets and improving
their access to credit,” said Bhushan Parekh, Director, Crisil.

New trend to help position India as world’s new factory

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The PLI scheme has been now extended to 10 other sectors following the commitments made by Apple and Samsung.

This adoption of a new technology and, for MSMEs, a relatively untested

marketing channel, augurs well for the Modi government’s ambitious plan of
positioning India as the world’s next factory.

The government, which launched a very progressive production-linked incentive

(PLI) scheme for high-end smartphones, has now extended it to 10 other sectors
following the commitments made by US tech behemoth Apple (through its
contract manufacturers Foxconn, Pegatron and Wistron) and South Korean
technology giant Samsung to set up and/or expand their manufacturing
footprint in the country.

The 10 new sectors are pharmaceuticals, automobiles and auto components,

telecom and networking products, advanced chemistry cell batteries, textile,
food products, solar modules, white goods, and specialty steel. The stated goal
of the government is to attract MNCs from the US, Europe, Japan, South Korea
and elsewhere, who are looking at de-risking their global supply chains from
over-reliance on China, to invest in India.

PIB India
@PIB_India

For the first time in the history of our country we shall

see participations of schools students along with
students from higher educational institutions with
regards to needs of the MSME industry in our country:
Union Minister @smritiirani at the launch of
#Toycathon2021

Watch on Twitter
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2:49 PM · Jan 5, 2021

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Digital ecosystem to grow

One challenge this country faces is that its MSMEs, which form the “ecosystem”,
which feeds the mother factories, set up by these MNCs, with inputs they need
to keep their wheels of production in motion.

The quick and seamless adoption of technology by Indian MSMEs will go a long
way in convincing these foreign investors that they can create the right eco-
system in India to keep their operations going at optimum levels.

Encouragingly, several manufacturing sectors have shown the way in adopting

digital channels to push sales during these trying times. Among them, gems &
jewellery and textiles have shown the most significant jumps.

Four-fold growth

The Crisil study shows adoption of technology to push sales has soared more
than four times in the former to 55 per cent in November, up from 13 per cent
in the immediate pre-Covid period.

“Textiles MSEs, too, show a massive jump of 38 percentage points in adoption of

digital channels compared with 20 per cent before the pandemic. The increase
was more for small enterprises (44 per cent, up from 13 per cent) than micro
ones (14 per cent, up from 7 per cent),” it said.
Even the real estate sector adopted the digital sales route. “Realtors were
impacted by the pandemic largely due to the unavailability of migrant labour
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and travel restrictions. Eventually, these players adapted to the new normal by
adopting digital sales channels and partnered with online aggregators to help
them with lead generation,” said Manasi Kulkarni, Associate Director, Crisil.

MSMEs are key to India’s economic fortunes

Research shows that adoption of technology to push sales has soared more than four times in the former to 55 per cent
in November, up from 13 per cent in the immediate pre-Covid period.

This trend is significant as MSMEs account for 30 per cent of the country’s GDP,
50 per cent of exports and almost 40 per cent of employment. Also, this
segment has been worst hit by the Covid-19 pandemic. So, an early return to
good health is a necessary pre-requisite for the Indian economy to return to the
high growth path this year.

Most international agencies and several noted economists have projected India
to grow at 9-12 per cent in the coming financial year. The growth of MSMEs,

which is a critical component of India’s manufacturing base, will play a critical

role in this economic expansion.

Therefore, the adoption of the digital route to their markets by MSMEs will play
a very important part in India’s economic rebound.

MSME Digital Marketing

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