One-third Of MSMEs Enhance Digital Presence During Lockdown: Reports

Digital transformation by Micro, Small, and Medium Enterprises (MSMEs) has traditionally lagged behind the expected growth curve. As per Zinnov Consulting, out of the 75 Million MSMEs based in India, 16-18 Million have a social media presence, an online listing, or a website. Out of 5 Million domain names registered in India, only half have a website behind them.

Ahead of International MSME Day 2020, Endurance International Group (“EIG”), the parent company of web presence brands like HostGator, Bluehost, ResellerClub, BigRock undertook a survey with Indian MSMEs to understand their adoption of digital presence in response to challenges during COVID-19.

According to the survey, approximately 30 per cent of MSMEs started a business website or enabled e-commerce functionality since the lockdown started owing to the COVID-19 pandemic. More than 50 per cent of MSMEs surveyed/embraced video conferencing tools and WhatsApp to keep business running during these turbulent times.

The importance of digital mediums during this crisis has had a resurgence. Preference for using digital is now approximately ~1.9 folds more than traditional sales interactions. MSMEs in the educational services segment recorded the highest jump in the importance of using digital mediums.

With lockdown measures in place, the MSMEs who were able to offer e-commerce functionality witnessed revenue contribution from e-commerce increasing to approximately 50 per cent of their total revenues. For MSMEs in retail and educational services, an increase in revenue contribution from e-commerce was 53 per cent and 65 per cent respectively.

The negative impact of COVID-19 on MSMEs has been intense with many having to pause or entirely shut their business. In this survey, one-third of MSME respondents confirmed that they are temporarily shutting their business until normalcy resumes. This pause in business is more prominent among MSMEs in metros cities and those in the retail and manufacturing verticals. Majority of MSMEs (nearly 60 per cent of those surveyed) believe that it will take up to 6 months for the business to return to normal.

MSMEs are seeking support from the government to tide over this crisis. More than 50 per cent of MSMEs expect the government to offer tax discounts or exemptions, followed by 36 per cent of MSMEs asking for loans at zero interest or cheaper rates.

“COVID-19 has forced everyone to rethink daily life. In response to the lockdown, MSMEs who could embrace digital presence were able to keep some semblance of normalcy and continue to serve or engage with their customers. This crisis has made it imperative to digitally transform our places of work. We are fortunate to be able to aid businesses in their digital transformation journey through our products and services,” saidManishDalal, SVP & General Manager, Endurance Group - APAC, having web presence brands like HostGator, Bluehost, ResellerClub, BigRock.

According to the survey, lack of technical expertise and the perceived costs of developing a web presence continue to be the key challenges to creating a web presence. Due to these challenges, very often MSMEs take assistance from web professionals to create a digital presence. India is primarily a DIFM (do-it-for-me) market and web professionals will play a key role in the digital enablement of MSMEs.

EIG caters to small business owners and web professionals, those who help small businesses to come online, through brands such as HostGator, Bluehost, ResellerClub, BigRock. These brands provide the tools and resources needed to build and establish a web presence, be found online, and improve productivity through digital solutions like domains, hosting, business email, and more.

Survey Methodology

To understand the digital trends among small businesses during the lockdown, EIG administered an online questionnaire to their MSME customers in the segments of retail, educational services, technology services, independent bloggers, consultant, advertising & marketing, travel, and finance. The majority of these MSMEs are in the metro cities. The survey was conducted over the first 2 weeks of June 2020.