Know how Indian SMBs are using automation to increase the market reach:
From being a land of a thousand villages and as many farmers, India is a natural incubator for enterprise, ambition and plenty of fire in the belly. Whether it is agriculture, indigenous crafts, consumer goods or technology, the Micro Small and Medium Enterprises (MSME) segment has been the cornerstone that has helped India grow into one of the fastest emerging economies in the world. Industry experts believe, it is this sector that will play a pivotal role in making India a $5 trillion economy by 2025.
According to the MSME Ministry’s 2019 annual report, out of the 6.33 crore MSMEs in India, only 0.05 lakh are medium enterprises while 3.31 lakh are small enterprises. The remaining 6.30 crore – over 99.5% of all MSMEs – are micro-units. It is no wonder that micro and small businesses are seeing a massive spike in entrepreneurial forays and angel funding. Established MSMEs and home-grown startups that cater to agriculture, FMCG, pharmaceuticals, consumer goods, education, logistics etc. have seen an almost vertical growth curve and mind-boggling revenues.
But how are such small companies creating such a colossal impact? How is the MSME sector creating so much value that it has become one of the biggest contributors to the country’s growth story?
Technology lights up the growth trajectory!
COVID-19 may have created the biggest economic and social upheaval across the globe, but it has also brought about something spectacular – the acceptance, proliferation and rapid evolution of new-age technology. The MSME sector that was earlier riddled with obsolete technology, supply chain inefficiencies and orthodox thinking is witnessing a metamorphosis of sorts, thanks to the pandemic. For example, fintech startups likee-loan apps, digital wallets, insurance aggregators etc. are enabling digital transactions for businesses that weren’t even considered possible a few years ago.
Similarly, the FMCG space has gone through a major transformation for not just the manufacturers but also the distributors, local retailers as well as consumers. MSME-centred tech, such as sales force automation solutions, e-commerce platforms, business accounting tools, last-mile logistics apps etc. has played a major role in revolutionizing the supply chain landscape in the FMCG, consumer goods and even the hospitality industry:
Greater Reach, Scale & Economy
Technology allows companies, specially micro and small enterprises, to make their presence felt, both in terms of visibility as well as agility. From something as simple as a mobile app that can help them directly place the stock order to a brand and get it delivered automatically, to a barcode payment system, to a digital data-based credit rating system that can help them avail loans to expand their business, tech solutions are offering phenomenal reach and the ability to scale up much faster. Another big advantage is the affordability.
As the business scales up, businesses can start investing more in feature-heavy, complex tech solutions as per requirements.
Stronger supply chain
Distribution management systems for manufacturing units or FMCG companies can help them digitize their supply chain management to substantially decrease operational costs, improve efficiencies and refine their sales forecasting, demand planning and logistics management. With better sales automation apps for sales and after-sales operation management, small retailers can have a stronger relationship with the brands and distributors as they will have clear visibility on the stock history, and orders received from them are fulfilled seamlessly via the sales automation app.
All of us have heard of at least one story where a mom-and-pop store or a fledgeling manufacturing outfit went bust because of the pandemic. Many lost their businesses because they were the most vulnerable as they had neither the time nor the resources to respond to such an exigency. Technology solutions give businesses the resources to be better armoured. E.g. cloud solutions offer data visibility at different levels of the operational workflow, so SMBs can take immediate action wherever needed.
Enhanced Customer Experience
It is well understood that the quality of customer service increases brand loyalty and customer ‘stickiness’. MSMEs rely on various tech solutions like CRM tools, marketing automation solutions, chatbots etc. to map out the entire customer engagement process and to enhance their customer service standards. Displaying automated operational capabilities with zero delays for order fulfilment, crafting targeted promotional campaigns and offering a clear, transparent transaction process are some of the ways SMBs can generate a loyal and happy customer base.
Even though 2020 has been a turbulent year, the future looks positively bright for MSMEs. Not just venture capitalists but also corporate heavyweights are betting big on micro and small businesses to outperform industry expectations. Creating a sustainable, vibrant technology ecosystem for the MSME sector would mutually benefit the tech-start-ups too; as the industry scales up and finds new challenges to conquer, tech start-ups will get an opportunity to create specific solutions to resolve these challenges. As MSMEs grow, the tech community will too.