Digital SMBs – Key Pillar of India’s Economy September 2019 1 Key Highlights
~75 Mn CCELERATING SMB BASE A SMB Base in India
70% IGITAL INFLUENCED SMBs D Are Digital Influenced SMBs
600+ GGREGATOR ENABLED A Aggregators are enabling rise of Digital SMBs
$30 Bn RODUCTIVITY LED DIGITAL SPEND P Digital opportunity offered by SMBs (2019)
105 Mn THRIVING SMB BASE Forecasted SMB base in 2024
Note: SMBs are businesses with FTE count of 1 to 999 further divided into 3 segments (Micro : 1-9; Small : 10-99; Medium : 100-999) 2 Source: Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward SMBs form a key pillar of the Indian Economy
Key Metrics - 2019 Contribution by SMBs Indian economy & SMB contribution Indian Government’s Vision 2958 (Contribution from SMBs)
50% GDP (Constant Prices in $Bn) 40% 1183 35%
520 Employment (in Mn) 45% 35% 180 30%
75% 535 Exports (in $Bn) 50% 40% Overall Count 277 Contribution from SMBs
2015 2019 2024
Note: 1. In SMB contribution to GDP/Employment/Exports, agriculture vertical is excluded 3 Source: World Bank, News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward With ‘Digitalization’ being the cornerstone of India’s SMB ecosystem
SMBs Vertical Digitally Influenced2 Key Sub-verticals witnessing Digitization (# Mn)
Retail 25 67% Electronics Pharmacy Grocery
Manufacturing 15 60% Automotive Drug & Pharma Textile
Logistics 4 71% Warehousing Transportation Packaging
67 Mn Travel & Hospitality 3 74% Travel (Cabs) Hotels F&B Outlets
Education 3 67% Coaching Centres Schools Colleges
NGOs 3 70% 33% Charitable Service Oriented -
Freelancers 3 67% Web developers App developers Consulting Professional Services 2 75% Accountants Architects Lawyers Real Estate 2 60% Brokers Developers . 75Mn segments Traditional Healthcare <2 75% Clinics Hospitals Diagnostic Labs
Total SMB BFSI <2 75% Trading Insurance Agents Mutual Fund Agents base in India IT/ITeS <1 100% ISVs Resellers App Developers (FY 2019*) Media & Entertainment <1 75% WebPublishers Developers PhotographersBroadcasters -. Digital Influenced SMBs Others 2 25% Telecom Energy & Utilities -
Housewife Resellers 4 100% Apparels Eatables Jewellery 1 Content Creators 2 100% Video content Social Blogs . 8 Mn Driver Partners 2 100% Cab Drivers Bike Drivers . Emerging
segments 70% Delivery Partners <1 100% F&B Delivery eCommerce Hyperlocal
Note: 1: Emerging Segment is the new family of SMBs which are using online products/solutions to earn their living. This category primarily consists of a single business owner ; 2: Digitally Influenced: SMB having access to digital infrastructure (PC/Smartphone and Internet). It may be listed on an aggregator portal (like Justdial) or have a website presence or listed on a social platform or communicating through WhatsApp/email; * (FY 2019 refers to the financial year ending on 31st March 2019) 4 Source: MSME, News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward The models of SMBs’ Digital Discovery are dramatically changing
Hybrid Model
Transaction Oriented Digital Presence Social-media led Discoverability Wave 4
Traditional Model Wave 3 Social Media New! SSL | Chatbots | SEO/ SEM Wave 2 influenced eCommerce eCommerce Wave 1 Social Media Domain Name + SMB Website SMBs at Wave 2, 3, 4 opting for websites: • Better customer experience SMB Digital Discovery Intensity Discovery SMB Digital • Save commission charged by Aggregators • Go Global
~5 Mn TLDs in India; 3+ Mn 400K+ 150K Over 2Mn Indian SMB pages registered Indian registered Indian registered Indian Resellers 53% attached to a Website on Facebook Resellers Resellers on Meesho
5 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Indian SMBs are at evolving levels of Digital Influence
75 Mn
Digital Influence Trends Transforming SMBs SMBs Distribution (~70% of Total SMBs) Level L1 Enabling next billion users go Online Emergence of new businesses through 48-52 M UBIQUITY OF CONNECTIVITY through Free Wi-Fi zones Digital Literacy & COMMUNICATION (Smartphone/PC/Internet/WhatsApp)
Digital Payments getting simplified by Mobile based Omni channel platforms Level L2 messaging platforms like WhatsApp 18-21 M SPEED OF TRANSACTIONS enabling easy and cost-effective banking (UPI/IndiaStack/Payment Wallets/PoS)
Level L3 Social media influenced commerce eCommerce platforms bridging the gap gaining traction between established sellers and SMBs 16-18 M RISE IN DISCOVERABILITY (Website/Online Listing/Social Media) Tech Giants partnering to provide Government offering subsidies & free Level L4 ENHANCED affordable best in class solutions solutions to make SMBs future ready 8-10 M PRODUCTIVITY (ERP/CRM/Accounting)
Level L5 <50K IOT in a box for Indian SMBs across Modern tech (RPA/ Robotics) offering a TECHNOLOGY SOPHISTICATION various verticals competitive edge to Indian SMBs
(RPA/IOT/Robotics)
Source: News Articles, Zinnov Analysis; L5 is a subset of L4,L3,L2,L1 6 SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward SMB to a ‘DIGITAL SMB’
CURRENT ADOPTION FUTURE ADOPTION
D DISCOVERABILITY I INSIGHTS ORIENTED BUSINESS G GLOBAL FOOTPRINT I INNOVATION T TRANSACTIONS A ACCESSIBILITY L LEARNING
S SECURITY M MOBILITY B BLITZSCALING
TECH ADOPTION Very High Very Low 7 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Rising digital adoption offers a huge opportunity of ~$30 Bn in 2019…
$ 26-30 Bn Total Opportunity CAGR ~ 25% $ 80-85 Bn (53%) Tapped Opportunity Digital Opportunity $ 14-16 Bn offered by SMBs
2019 (E) 2024 (P)
Tapped Opportunity Across Levels (2019)
L1 L2 L3 L4 L5
Levels of Adoption UBIQUITY OF SPEED OF RISE IN ENHANCED TECHNOLOGY CONNECTIVITY & TRANSACTIONS DISCOVERABILITY PRODUCTIVITY SOPHISTICATION COMMUNICATION
% Share 28-30% 40-42% (Tapped Opportunity) 3-5% 18-20% 3-5%
Note: : Digital Opportunity : Total addressable market across various levels of tech adoption distributed by workloads like networking, productivity solutions, payment methods and customer engagement; Spend for Smartphones are excluded in the digital opportunity ; E:Estimated, P: Predicted 8 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward ...which is getting unlocked by ‘Connected Nation’
Maharashtra Key Cities – Mumbai, Thane, Pune, Nagpur, Delhi NCR Key Cities - New Delhi, Noida, Gurgaon & Nasik, Aurangabad, Washim Faridabad 1 6 Key Verticals – Manufacturing, Retail, Travel & Key Verticals – Retail, Manufacturing, Hospitality, Professional Services Professional Services , Travel & Hospitality
Uttar Pradesh Key Cities – Lucknow, Kanpur, Meerut, Telangana Key Cities – Hyderabad, Warangal, Varanasi, Agra Karimnagar, Adilabad 2 7 Key Verticals – Manufacturing, Retail, Travel Key Verticals – Logistics, Professional & Hospitality, Education Services, Travel & Hospitality
Gujarat Key Cities – Ahmedabad, Vadodara, Rajkot, Madhya Pradesh Key Cities – Bhopal, Indore, Jabalpur, Surat, Gandhi Nagar Gwalior, Sagar 3 8 Key Verticals – Manufacturing, Education, Key Verticals – Education, Manufacturing, Retail, Professional Services Retail
Tamil Nadu Key Cities – Chennai, Coimbatore, Madurai, Kerala Key Cities - Thrissur, Kochi, Kozhikode, Tirupur Thiruvananthapuram 9 4 Key Verticals – Manufacturing, Retail, Key Verticals – Manufacturing, Professional Professional Services, Travel & Hospitality Services
Karnataka Key Cities – Mysore, Bengaluru, Hubli, Andhra Pradesh Key Cities – Vishakhapatnam, Vijayawada, Belgaum Anantapur 5 10 Key Verticals – Manufacturing, Logistics, Key Verticals – Logistics, Travel & Hospitality Professional Services
Opportunity High Medium Low Note: States prioritization is based on three broad parameters, namely a) State Digital Business Index, b) State *Vertical* Index, c) State’s Startup Ranking. State Digital Business Index indicated combined assessment of factors including # of tech addressable SMBs, tele-density, PC and internet penetration, e-readiness rating, state GDP, average SMB asset base etc. State *vertical* Index indicates a combined assessment of various vertical specific parameters, such as vertical clusters, urbanization index, literacy rate, tourism etc., State Start up Ranking is assessment of a state with respect to the start up ecosystem 9 Source: MSME, Planning Commission, State Websites, TRAI, Ministry of Tourism, Census Report, World Bank, Ministry of Road Transport and Highways, Crisil, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward …and getting further unlocked by ‘Connected Verticals’
Verticals Opportunity ($Bn) % Share in Digital Opportunity L1 L2 L3 L4 L5 Retail 6.2 22% Manufacturing 4.8 17% Education 3 11% Travel & Hospitality 2.8 10%
Professional Services 1.7 6% Levels TechInfluence on Focus Logistics 1.4 5% Healthcare 1.1 4% BFSI 1.1 4% Freelancers 0.8 3% IT/ITeS 0.8 3% Real Estate 0.6 2% M & E 0.6 2% NGOs 0.3 1% Others 0.6 2% Housewife Resellers 0.8 3% Content Creators 0.6 3% Driver Partners 0.6 1% Delivery Partners 0.3 1%
Legend High Medium Low
Note: Tapped Opportunity: The market size of digital adoption i.e, the current spending of SMBs in Digital Technologies; Untapped Opportunity: The potential addressable/targetable market for solution providers 10 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Top trends influencing Digital SMBs across industries
Top 3 Trends across verticals
eCommerce Model B2B to B2C Model GST Initiative1 1 RETAIL
Export Competitiveness US-China Trade Dispute Backward Integration 2 MANUFACTURING
Gamification of Learning eLearning EdTech Start-ups Key Trends Shaping 3 EDUCATION Top Verticals
TRAVEL & Shared Economy Model Incredible India Tech Augmentation 4 HOSPITALITY
Hyper Localisation GST Initiative2 Elastic Logistics 5 LOGISTICS
Logos are illustrative solutions/Platforms Note: Key trends are the top 3 initiatives/disrupters that are facilitating digitalization of SMBs; 1: Retail SMBs are getting registered under GST act to avail Accounting benefits. 2: The initiative has eased cross border trade cross border trade by reducing the taxes 11 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Majority of Retail SMBs are enabled by Aggregators
SMB Count Total Employment FTE Count Digitally Influenced Opportunity Size1 Retail 0.1% 100+ 25 Mn 54 Mn 0.9% 10-99 67% $ 6.2 Bn (17 Mn) L1 L2 L3 L4 L5 99% 1-9 Focus on Tech Influence levels
Key Trends Top 3 Digitally influenced industries
eCommerce Model B2B to B2C Model GST Initiative Electronics Pharmacy Grocery
• Maharashtra • Gujarat • Gujarat • Shifting from supplier to • Shifting from traditional B2B • Organized and transparent • Tamil Nadu • Maharashtra • Delhi NCR eCommerce model by selling to B2C business to earn more processes enabling • Andhra Pradesh • Karnataka • Karnataka
through online platforms profit and faster time to frictionless businesses Major Clusters market Nationwide • Using Platforms to target cross border customers and • Following up with customers • Reduction of taxes by Illustrative Aggregators managing operations in a at every stage of the purchase unification of markets by cost-effective manner journey unlike B2B model combining state and center tax B2C Marketplace B2C & B2B Marketplace 4 Mn+ Users | 1K+ Stores 5k+ SMBs | 60k Daily Orders • Providing guidance for • Operating in 25 cities to sell licensing and assurance of 5K+ products • Flipkart/ Snapdeal/ Amazon • BigBasket • Quickbooks ongoing compliance Udaan • IndiaMart • Tally Accounting • Doubled average order value • Managing 35K+ SKUs from $10 in 2015 to $20 in 2019 Illustrative Solutions/Platforms
Legend High Medium Low Note: 1: Opportunity Size refers to the total addressable opportunity for 2019 12 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Manufacturing SMBs are relatively low on digital adoption
SMB Count Total Employment FTE Count Digitally Influenced Opportunity Size1 Manufacturing 2% 100+ 15 Mn 60 Mn 11% 10-99 60% $ 4.8 Bn (9 Mn) L1 L2 L3 L4 L5 87% 1-9 Focus on Tech Influence levels
Key Trends Top 3 Digitally influenced industries
Textile Export Competitiveness US-China Trade Dispute Backward Integration Automotive Drug & Pharma
• Maharashtra • Maharashtra • Rajasthan • Increased participation of • US-China trade dispute • SMBs are focusing on • Gujarat • Gujarat • Uttar Pradesh SMBs in export trade through coupled with Make in India technology integration by • Madhya Pradesh • Telangana • Madhya Pradesh
collaboration of supply chain expected to give boost to producing materials/ Major Clusters India’s SMB manufacturing components for self use • Building an international industry supply chain and foreign • Provides competitive Illustrative Aggregators retail locations for business • India can increase its exports advantage and better control expansion by ~$11 Bn in the long term by enhancing the supply chain due to the US-China trade dispute B2B Marketplace B2B Marketplace 4k Sellers | 75k Customers 50k SMBs | 100+ Suppliers • Connected Customers to B2B • Providing cheaper raw merchants selling over 700k material to SMBs by placing • Amazon Seller App products - • Zomato Hyperpure bulk orders • Trade India • Revenue growth of 8x since • Revenue growth of 7x since 2016 2016. Illustrative Solutions/Platforms
Legend High Medium Low Note: 1: Opportunity Size refers to the total addressable opportunity for 2019 13 Source: News Articles, Zinnov Analysis, UNCTAD SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Gamification and eLearning SMBs are reshaping the ‘Education’ ecosystem
SMB Count Total Employment FTE Count Digitally Influenced Opportunity Size1 Education 1% 100+ 3 Mn 8 Mn 38% 10-99 67% $ 3 Bn 1-9 (2 Mn) L1 L2 L3 L4 L5 68% Focus on Tech Influence levels
Key Trends Top 3 Digitally influenced industries
Gamification of Learning e-Learning EdTech Startups Coaching Center Schools Colleges
• Uttar Pradesh • Uttar Pradesh • Delhi NCR • Incorporation of game design • SMBs are increasingly • Promoting adoption of • Andhra Pradesh • Madhya Pradesh • Uttar Pradesh elements in teaching recognizing e-learning as a software, hardware, devices, • Rajasthan • Maharashtra • Rajasthan
convenient and cost-effective online programs, servers, Major Clusters • Pre and Primary educational mode of teaching cloud storage in ecosystem institutes are the early adopters of Games/ activity • Tackling the inconsistencies • Bridging the gap between Illustrative Aggregators based learning and inequalities in the system SMBs and students through and to transform education digital platforms industry of the country Online Teaching Learning Platform 13 Mn+ Students | 2500 Cities 35 Mn+ Users | 2.4 Mn Paying • Interactive live classes, mock users • Educomp Smart Classes tests as well as 1-to-1 • Based on freemium model; • PlayAblo • UpGrad learning • GetApp mentorship free for 15 days • Edutopia • Unacademy • 4X higher engagement than • Using AI/ML for personalized recorded lectures learning Illustrative Solutions/Platforms
Legend High Medium Low Note: 1: Opportunity Size refers to the total addressable opportunity for 2019 14 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Even though SMB count is less, T&H segment is high on digital adoption
Travel & SMB Count Total Employment FTE Count Digitally Influenced Opportunity Size1
Hospitality 0.1% 100+ 3 Mn 8 Mn 3.9% 10-99 75% $ 2.8 Bn (2.2 Mn) L1 L2 L3 L4 L5 96% 1-9 Focus on Tech Influence levels
Key Trends Top 3 Digitally influenced industries
Travel (Cabs) Hotels F & B Shared economy models Incredible India Tech Augmentation
• Tamil Nadu • Maharashtra • Maharashtra • Value stays have disrupted • Government’s initiatives such • Digital consumers are helping • Karnataka • Delhi NCR • Gujarat the hospitality industry as ‘Incredible India!’ and re-shape the hospitality • Maharashtra • Kerala • Tamil Nadu
‘Athiti Devo Bhava’ has industry Major Clusters • Digitalization has enabled provided a focused impetus to SMBs to be discoverable and growth • Mobility has given an impetus compete with incumbents to tech adoption by SMBs Illustrative Aggregators • Making SMBs discoverable through their website and promoting tourism in India Promoting local Businesses Hotel Aggregator 68K+ SMBs | 4.3Mn monthly 800K+ Customers | 9K+ Customers Partners • Discovering merchants for • Presence across 260+ cities in • Oyo Rooms • GoDaddy • Freshbooks Accounting customers in 33+ cities India • Swiggy • Zoho CRM • No upfront cost for • Connected 150K+ rooms to registration customers Illustrative Solutions/Platforms
Legend High Medium Low Note: 1: Opportunity Size refers to the total addressable opportunity for 2019 15 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Future of the Logistics segment being enabled by Aggregators
SMB Count Total Employment FTE Count Digitally Influenced Opportunity Size1 Logistics 2% 100+ 4 Mn 5.5 Mn 4% 10-99 75% $ 1.4 Bn (3 Mn) L1 L2 L3 L4 L5 94% 1-9 Focus on Tech Influence levels
Key Trends Top 3 Digitally influenced industries
Warehousing Transport Packaging Elastic Logistics Hyper Localization GST Initiative
• Maharashtra • Gujarat • Maharashtra • Invest based on market • Focus on building robust • Switch to GST led to at least • Delhi NCR • Punjab • Gujarat fluctuations supply chain that is located 20% reduction in turnaround • West Bengal • Andhra Pradesh • Tamil Nadu
close to both, buyer and time in logistics Major Clusters • Reduce losses due to seller predictability of change in • Save time at interstate demand • Increased reliance on borders Illustrative Aggregators technology to achieve the dynamic and cost-effective supply chains Logistics Marketplace Warehousing Aggregator 6K+ Sellers | 25k+ Pincodes 10+ Cities | 100+ Clients • Resolving e-commerce • On Demand warehousing backend issues like platform for supply chain • SuperProcure • Dunzo Delivery • Cleartax packaging, logistics etc. • ezTrack • Locus.sh • Tally Accounting operations • Advanced plans @$ 30 with • Pay-as-you-go based model international shipping Illustrative Solutions/Platforms
Legend High Medium Low Note: 1: Opportunity Size refers to the total addressable opportunity for 2019 16 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Content Aggregators such as YouTube are helping entrepreneurs to showcase their Skills & Talent
Operational Model Content Creators 2 Mn Digital Platforms enable SMBs to share their content with (SMBs Count) audience and earn money from advertisements L1 L2 L3 L4 L5 Focus on Tech Influence levels Content Creators
Video Blogs Infographics Others Creates content and uploads it on a digital platform 50-60% 25-30% 10-12% 6-8% Pays money to SMBs • Entertainment • Health & Fitness • Marketing • Politics based on Content Views/ (Music/ Dance/ • Travel • Online Games • Technology Channel Subscribers Cookery) • DIY Blogging • Invitation Cards • Fashion trends Digital Platform Advertisers Showcase their Trending Categories on YouTube in India (Mn) Key Highlights Aggregates content under ads on Digital various categories/ channels Platforms • India is the fastest growing Media & Entertainment market globally. 350 220 110 100 85 Shows content to Audiences based on their • India’s video streaming industry is expected to interest/ viewing history grow at a CAGR of ~22% to reach $ 1.7 Bn by Music Entertainment News Comedy Educati on 2023 Audiences • YouTube Channels with 1Mn+ subscribers Changing Business Models: Watches/Reads the content/ increased from in 2014 to in 2019 16 1200 Content creators are moving a step ahead and expanding Subscribes to Platforms their businesses in following domains:
• More than 90% of users on YouTube
India consume content in local languages and • Selling own Products dialects • Consulting Services A YouTuber started a channel for cooking“ • Brand deals and sponsorship recipes in 2013; struggled initially but is now “ earning more than INR 40K monthly
17 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Housewife Resellers are leveraging Social Media influenced eCommerce
Housewife Operational Model Resellers 4 Mn Social media influenced eCommerce (SMBs Count) L1 L2 L3 L4 L5
Focus on Tech Influence levels Manufacturer/ Wholesaler Forges partnership with Aggregator (Meesho) and share their Shares product Clothing Accessories Home Decor Electronics catalogue Aggregators push product 10-15% catalogues to Housewife 60-70% 18-20% 8-10% Resellers (who are registered on their platforms) • Suit, Kurti • Jewelry • Bedsheet, Cushion • Home Appliances • Bridal Wear • Watches, Handbags cover • Smartphones • Saree & Blouse • Footwear • Towel, Curtain • Home Entertainment Housewife Reseller Reaches out to potential customers on Social media (Facebook, Instagram, WhatsApp) and share product catalogues 60% Of the Resellers driving Social eCommerce are Women Contact Resellers Reseller places the to buy the order on Customers’ $100-150 Average monthly commission of women resellers advertised Product behalf
Customers Buy the product from Resellers while Platform product delivery is managed by the Manufacturer/ Wholesaler
Founded in 2015 2015 2017 Resellers (Mn) 0.5 2.5 0.2 “ I earn around $200 per month from home with Meesho, while getting the flexibility of Illustrative Platforms Illustrative “ Funding ($ Mn) 16 215 24 taking care of family -Jansi Anthony, Homemaker
18 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Ecosystem is playing a key role in SMBs’ transition to a ‘DIGITAL SMB’
1 2 3 4 5 6 Aggregators Tech ISVs Start-ups Large Enterprises Government NGOs/NPOs
• Access to newer • SMB-first solutions • Access to Mobile- • One-stop • Initiatives to make • Enabling markets through that are secure and first and Cloud- destination for technology entrepreneurship online channels enterprise grade first tech solutions SMBs affordable for and creating Indian SMBs employment opportunities
• Frictionless • Accelerate Digital • Innovative Pricing access to capital • Bringing digital • Secure and fast • Accelerating transformation of models to using digital IPs for the SMB Banking through hypergrowth traditional SMBs accelerate tech platforms and ecosystem Digital Platforms through Training adoption algorithms and Mentoring
• Drive Growth of Emerging SMB • Improve • Rapid adoption of • Skilling SMBs to • Access to capital • Bridging gaps Categories such as Discoverability Digital payment help develop with lesser between SMBs Housewife and enable SMBs go platforms Entrepreneurial paperwork and investors Resellers, Driver global mindset Partners, etc.
19 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Aggregators are driving the growth of Digital SMBs in India
Serving 300K+ SMBs | 100+ Serving >5 Mn SMBs | SMBs earning (more than 82+ Mn Buyers $100K) Access to: • Access to newer markets Access to: • Large market outreach • 180+ countries • Leads Management System • Easy and free shipping • Pay with Indiamart • Weekly Settlements
Serving 55K+ SMBs | 5 Mn Serving 30K SMBs | orders per month 100K Truck Fleet size • Accelerating digital Access to: Access to: transformation of SMBs • Larger Customer Base • GST Compliant platform across traditional verticals • Delivery fleet • Direct payments to bank AGGREGATORS • Business Analytics tool • AI/ML based insights
Serving 2 Mn+ Resellers | Target Employing 1 Mn + Drivers| of 20 Mn set by 2020 Presence in 100+ cities • Driving growth of emerging • Facebook brought a stake in SMB categories such as Meesho (invested $25 Mn) • Daily Payment settlements Housewife Resellers, Driver • Enabling emergence of Part • 1.5 Mn+ Daily rides Partners, etc. time entrepreneurs • ‘Chalo Befikar’ insurance for • 65% resellers focusing on driver partners with $7K cover Apparel sale
20 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Tech ISVs bringing SMB-focused offerings to the Indian market
SMB Focused ‘Start Programme’| SMB Focused ‘Navlekha 5K+ SMBs Onboarded Programme’ | Onboarded ~1K Publishers • SMB-first solutions that are • Helping SMBs go digital with secure and enterprise grade connectivity solutions at <$ 70 • Helping Offline Indic language per year publishers to go online • Plans to increase current SMB • Setting up free websites for SMBs base from 30K to ~100K • Targeting 25 cities across India
1.5 Mn Customers | Over 90% 100K Customers | Over 85% Customers are SMBs Customers are SMBs • Freemium pricing models to Access to: make technology affordable for Access to: • On site and Off-site Support • Free accounting solution to SMBs mass adoption • Tally Xcelerator for (revenue < $200K) TECH ISVs consultancy services for SMBs • 14 days free trial to all clients
1 Mn+ Customers | 70% SMBs 3 Mn+ SMB pages | 100 Mn+ from Tier 2 cities Audience connected
• Improve Discoverability • Online Bundle solution for SMBs • Advanced features such as multi and enable SMBs Go Global at < $0.5 per day country lookalike audience, • Acquisition of Sellbrite to dynamic language optimization target more SMBs offered to SMB pages
21 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Start-ups are producing innovative solutions to make SMBs more efficient
Serving 150K SMBs | India’s Serving 50K SMBs | 140+ Loans Fastest Unicorn Approved
• Access to Mobile-first and Access to: Access to: Cloud-first tech solutions • B2B online selling platform • SMB marketplace for trade • Buyers : 2 Mn across 900 cities • Cost effective raw material • Sellers : 25-30K in 200 Cities • Lending for online SMBs
Serving 1100+ SMBs | Credit Serving 125K SMBs | 30-40K upto $300K monthly loan requests • Frictionless access to Access to: • Using ML to automate loan capital using digital platforms • Collateral free loans Processing and algorithms • Low rate of interest • Tailored financial products START UPS • Flexible Payments • Short term unsecured business loans
Serving 100K+ Merchants | Serving 100K SMBs | 6 Mn Presence in 3K towns Customers | 49K Transactions/day • Customer Engagement with • Help drive adoption of digital big data analytics Access to: payment platforms • Collaborated with GPay • Last mile near sourcing enabling offline merchants • Integrating Supply chain to process payments through • MPoS Payment Services GPay
22 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Large Enterprises are empowering the SMBs to go digital
Jio Phones | Jio GigaFibre| Jio GST| Airtel Business for SMBs| GST Merchant App | Jio POS Advantage | >0.5 Mn SMBs
• One-stop destination for • Jio E-commerce platform to empower • SMBs can select and purchase internet SMBs 1.2 Mn small retailers plans via unlimited leased lines • MPos solutions for retailers at • GST Advantage will help SMBs file 1/3rd of the traditional cost GST returns accurately and securely • Jio Drive - affordable cloud solutions
InstaBIZ |Digital Banking platform| Partner Network Go Digital| 115 Products & Services Distribution of free Accounting solution • Bringing digital IPs for the • Instant online overdraft facility up SMB ecosystem to $20K • Shell India offered free accounting • Banking transactions ‘on the go’ for solutions from Tally to all its LARGE SMBs without branch visit dealer/partner network • Instant payment of GST enabled ENTERPRISES
25 Cash & Carry Stores | 1 Mn SMBs 400 DOJO training centers by 2020| connected | Skilling and Training Skilling and Training • Skilling SMBs, helping develop an entrepreneurial • SMBs supplier ecosystem boosted with • DOJO center to help in skilling, re- mindset and make SMBs each store opening skilling and right skilling of workers • Direct sourcing of produce from local • financially independent Ensure quality and help develop skills farmers in Productivity
23 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Government is playing a crucial for the upliftment of SMB ecosystem
60% Subsidy on Cloud adoption | Technology & Quality Upgradation Total budget of $10 Mn for SMBs
• Initiatives to make technology • To promote adoption of cloud • To promote energy efficient affordable for Indian SMBs services in SMBs maximum technologies for SMBs subsidy of $1.5K/SMB to be • Providing them with 75% disbursed expenditure to buy these technologies
Account Aggregators reducing Processing time | 6 Aggregators approved by RBI
• Secure and fast Banking • A new approach DEPA1, transforming the Organization centric system to human through Digital Platforms centric system • Financial sector will be the earliest adopter followed by telecom, healthcare and others GOVERNMENT • Enables sharing of digital financial data with third-party applications
~$150K Loan in 59 Minutes | Upfront Capital subsidy of 15% ~ 30K proposals sanctioned under CLCSS2
• Access to capital with lesser • Launched a website reducing • Aiming at reduce cost of paperwork turnaround time from 28 days to production of goods and services 59 minutes • The cap for maximum amount is • Rate of interest starts form 8.5 % $20K
Note: 1: Data Empowerment and Protection Architecture; 2: Credit Linked Capital Subsidy Scheme 24 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward NGOs & NPOs are also helping SMBs to address the skilling/funding challenge
~38K Registered Website users | 35K+ SMBs supported • Enabling entrepreneurship and creating employment • $ 4 Mn+ loan has been facilitated to 290+ SMBs opportunities • Facilitates expert's advice based on their vast experience and 70+ Online Business Guides • Helping to improve Business performance through supporting resources/tools
Targeting to help 15K SMBs till 2029 | AI enabled technology platform • Accelerating hypergrowth through Training and • Supporting SMBs with revenue $1Mn to $50Mn have a 2x to 10x growth Mentoring • ‘Advantage program’ for growth of small entrepreneurs • NGOs/NPOs Offering advisory, strategic and operational services at subsidized fees
Helped 600+ social entrepreneurs | i-TIC Foundation with IIT Hyderabad
• Bridging gap between SMBs • SEAS initiative for conducting workshops and engagements for 6-month and investors period • Annual competition giving opportunity to SMBs to spend 10 days in silicon valley
Note: SEAS: Social Entrepreneur Advisory Services 25 Source: News Articles, Zinnov Analysis SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward Way Forward…
Snapshot of ‘DIGITAL SMBs’ in 2024
Digital Adoption
90% Digital influenced SMBs in 2024
40% of the SMBs will be Digitally discoverable through Websites, Online listings or Social Media $80 Bn Digital Opportunity (in 2024) Emerging Segments Growing Digital Awareness 25 Mn by 2024 ; CAGR of 30% from 2019 to 2024 50% increase in Digital opportunity per SMB, rising from $ 400 in 2019 to $ 800 by 2024
~70% of the emerging segment will include Online resellers (Housewife/ Part-timers) & influencers Dominance of New age technologies >10% contribution by Technology Sophistication level (L5) by 2024 ; ~5% in 2019 Ecosystem Initiatives ~60% subsidy on cloud by the Indian government to boost tech adoption among SMBs
25% mandatory procurement from MSMEs by public sector enterprises helping in SMBs business expansion
26 Source: News Articles, Zinnov Analysis