52% of Indian MSMEs saw a positive impact post pandemic: PayPal survey

According to a PayPal survey, 52% of small businesses saw a favourable influence on their business once economies reopened after two years of the pandemic. According to the "MSME Digital Readiness Survey," 29% of MSMEs believe the business environment in India has improved for online sales, and 31% believe the cross-border prospect is good.

Consumer behaviour has shifted as a result of the lockdowns, according to the survey. It has cleared the door for virtual retail purchases. Clients are more amenable to adopting multiple payment options, according to MSMEs, who have experienced a 65% increase in online purchases from their customers.

Because of the convenience, accessibility, and use of digital techniques, 51% of MSMEs saw a rise in spending from existing consumers, while 46% saw an increase in repeat purchases. Building an owned internet presence will be a top emphasis going forward. Currently, 66% of MSMEs utilise social media as an online selling channel, followed by marketplaces (62%), company-owned platforms (61%), own ecommerce website (54%), and third-party ecommerce platforms (54%).

When compared to third-party platforms, owned firm channels often offer more flexibility, control, and freedom to business owners when selling online. Businesses are modifying their priorities in response to changing customer behaviour, with the highest intentions to adopt a company ecommerce website and company-owned platforms to engage in online selling at 29% and 28%, respectively.

This is critical for India's SMEs, as 49% of respondents indicate a strong desire to create their own website or app. However, this independence raises some difficulties, the most serious of which is the availability of technical talent. Lack of technical skills was indicated as the number one hurdle by more than half of the respondents (56%) who do not already sell through their own channels.

Nearly all Indian SMEs feel that cross-border trading should be a top priority in the coming year. In India, cross-border adoption is high: 64% of merchants used it before the outbreak, and 35% used it during the pandemic. During COVID-19, 86% of MSMEs selling globally claimed to have seen an increase in cross-border commerce. Much of this success can be credited to other economies reopening and improving consumer mood around the world. 94% of respondents agreed that crossing borders leads to growth and are making cross-border trade a corporate priority in the future.

Almost all of the firms polled said they would like to invest in more payment methods. 95% want to introduce new payment methods, while 89% want to improve card payments. Following that, services are optimised to accept digital wallets like as PayPal (70%).

The check-out experience that small businesses deliver to customers is becoming increasingly popular. In order to enhance sales, nearly 40% of respondents plan to invest in upgrading the checkout and payment process. Small firms cite a variety of reasons for doing so, including accepting payment through new digital sales channels (60%), integrating loyalty programmes (57%), and expanding new, local payment ways to sell cross-border (56%).

Businesses are fighting for a piece of the consumer's cash as competition heats up. According to the poll, 49% of Indian MSMEs plan to invest in technology to improve customer service. Increased customer loyalty and the ability to extend their customer base are both benefits of a flawless check-out experience.

The survey was carried out between October and November 2021, and it is based on responses from 250 company decision-makers in India's MSME sector, which is defined as having an annual turnover of Rs. 5 (US$ 6717) to less than Rs. 250 crore (US$ 33 million). The companies have an average turnover of Rs. 123 crore (US$ 16.5 million) and a workforce of 386 people. The sample supports a diverse range of industries, with the Services (36%), Production (28%), and Retail & Hospitality (16%) sectors dominating.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.