TLI Staff
New Delhi: Seen as laggard in embracing new technology, micro and small and enterprises (MSEs) are making big strides in going digital to shore up their sales in pandemic times.
A survey among firms with less than Rs 25 crore annual turnover has found that the number of firms using digital sales channels such as online aggregators, social media and mobile marketing has shot up in the last few months.
As per the survey carried out by ratings and research firm Crisil, about 29% of the MSEs surveyed were using digital sales channels before the pandemic struck. That number has shot up to 53% among small enterprises and 47% 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,” Crisil Director Bhushan Parekh said in a statement.
Most of the manufacturing MSEs which quickened digitisation were in gems & jewellery and textiles sector. In the services sector, realtors and human resources (HR) firms showed maximum adoption of digital sales channels.
“Realtors were impacted by the pandemic largely due to the unavailability of migrant labour 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,” Crisil’s Associate Director Manasi Kulkarni noted.
The survey conducted in the month of November covered 566 micro and small enterprises. A good 45% of these were micro enterprises, or those with annual revenue of less than Rs 5 crore. The remaining were small enterprises with revenue in the range of Rs 5-25 crore.
Large firms with sufficient capital generally adopt technology at faster pace compared to SMEs. This is the reason, SMEs struggle hard to compete with bigger firms and remain small for longer period of time. It has been seen that adoption of technology brings level-playing field for SMEs with large firms and help them increase their market share.
With limited access to institutional finance and hence insufficient capital, SMEs are most vulnerable to economic shocks. Given the calamitous impact of pandemic on business and economy, a bulk of the MSEs are battling for survival.
(Image source: Twitter/Ministry of Textiles)