Digital SMBs: $11.6bn opportunity for tech cos

BANGALORE, INDIA: Digital enablement of Indian SMBs presents a multi-billion dollar opportunity for tech vendors. A recent study by Zinnov on ‘Digital SMBs’ says that digital enablement of the SMB is going to present a $25.8 Billion for tech vendors by 2020.

IT adoption by SMB’s in India is hindered because inability to easily adopt solutions meant for large enterprises. They aren’t in a position to invest upfront in infrastructure, most solutions offered to them in the market are generic and lack vertical centricity, and majority of the solutions are feature rich solutions with high learning curve.

India is home to over 51 Million Small and Medium Businesses. While today only 40% of these SMB’s are influenced by technology, the number is expected to increase to 90% of all SMB’s by 2020. It is projected that this number will upsurge from $11.6 billion to $25.8 billion by 2020. 

Affordable enterprise grade solutions such as cloud solutions and mobile app ecosystem are increasingly driving SMBs towards digital enablement.

Strategic initiatives required to be set in motion to tap into the digital SMB opportunity. To successfully target SMBs we need a 3-pronged approach:

• Engineering Product for SMB use
• Optimum pricing to ease SMB adoption
• High Impact outreach enabling large scale

Maharashtra has the highest share in opportunity (8.1%) led by professional services, restaurants, and retail verticals. Tamil Nadu’s is next in opportunity with 6.9% market share. Gujrat and Uttar Pradesh hold a share of 6.8% and 6.5% respectively. Karnataka, Delhi NCR and Andhra Pradesh have a share of 6.1% each. Kerala presents 5.9% of the digital enablement opportunity mainly within the logistics sector.

Zinnov estimates an opportunity of $3.8 billion in provision of customer targeting and engagement solutions to Indian SMBs. Avenues to enhance discoverability, such as website creation and portal listings, constitute a large market within SMBs. In addition, enabling SMBs to sell over internet can potentially drive annual revenues.

In another estimate made in the study, there is an opportunity of $2.5 billion in provision of Operational Excellence solutions to Indian SMBs. Overall market for operational excellence solutions is expected to grow at a CAGR of 17% to reach $5.5 billion by 2020.

Workforce hiring and retention are one of the biggest pain points in SMB. Solutions addressing the same across hierarchy levels have a massive opportunity among SMBs and is expected to be an opportunity of $3.1 billion.

Arvind Rawat, engagement manager at Zinnov said,“It is estimated that an additional $1.1 trillion will be contributed to the GDP due to adoption of digital technologies by SMBs in 2020 with a 75% of overall enhancement in SMBs performance. 168 million additional jobs will be created to power incremental output aided by digitization.”