2010 to be cash positive for Indian SMB

BANGALORE, INDIA:  As the recession-hit year comes to a close, most of SMEs in India believe that market conditions would improve in 2010, resulting in increased revenues and growth, reveals a study conducted by Synovate Business Consulting in association with Alibaba.com.

The study notes that more than half of Indian SMEs are highly optimistic in their view that the coming year 2010 would be better in terms of overall business activity and profitability of their industry.

92 per cent of SMEs believe that revenues would increase in 2010 and the revenue growth would be around 6-15 per cent. Also, nearly 58 per cent believe that 2010 would be better for the performance and profitability of their own businesses.

The survey analyzed data collected from 500 SMEs spread across diverse SME clusters in India and spanning various industry verticals, said a press release.

The report also reveals that, on the whole, most SMEs have benefited from the dawn of globalization that has given them access to wider markets, improved business processes, better managerial capabilities and greater competitiveness.

The US is the leading country with which most Indian SMEs do export business followed by Germany, UK, Singapore, UAE and Saudi Arabia.

However, most industries including major SME clusters experienced serious fall in number of customers, order quantities and values coupled with increasing difficulties in managing international customers and increased competition from other low cost producing nations since the economic crisis set in late last year.

With a mix of strategies and tools like aggressive focus on searching newer sources of supply, exploring newer markets, dedicated marketing, cost cutting, multitasking and staff training, the Indian SME sector was able to withstand the crisis period, said the study.

Most SMEs have explored newer markets and have adopted cost-cutting measures.

Brian Wong, head of Global Sales, Alibaba.com said, “SMEs are the backbone of the Indian industry, with a consistent contribution of 45 per cent to India’s total manufacturing output and 6 per cent GDP over the last 5 years. With a total SME base of around 14 million, India is a very important market for us and we have grown our member base substantially over the past few years.”

He further added that in order to serve the Indian SMEs better, they realized that it is important for to understand issues affecting SMEs business growth and specific challenges faced particularly after the recession. With the insights gained, they will work on a definitive plan of action to serve Indian SMEs.