To be able to catch up with the new age customers, a lot of traditional businesses are going online and revamping their digital presence. However, this number is still minuscule given the size of the small and medium business community in India. Majority of them are still not aware of the advantages that technology can reap in from scale, growth and productivity. “While competing with big fishes in the pond, SMEs now need to keep pace with new-age startups,” feels Ajay Sehgal, senior vice-president and head SME and SOHO business, Vodafone Business Services, in a chat with SME Futures. Excerpts below:
Can you give me an overview of how SMEs have evolved in India?
SMEs play an important role in India’s economic growth and development today. A new wave of SMEs in the country is rising to approximately 46 million with a potential to increase the share of GDP contribution from eight per cent to up to 15 per cent by 2020. We see the growth of SMEs coming from the non-metro cities and smaller towns, since large corporates are moving into these cities due to high real estate cost in metros and a lack of space availability, leading to building of infrastructure in smaller cities.
Do you see any new set of challenges for small and medium businesses? Are traditional businesses still ignorant of being present online?
While competing with big fish in the pond, SMEs now need to keep pace with new-age start-ups as well. These start-ups come either with a disruptive digital business model or a brilliant technology idea with a social cause to give back to the society and are clearly changing the way the markets are working in India today. In other words, small businesses are still driven by profitability and building nest eggs while start-ups are motivated to create a dent in the universe with a focus on top-end revenue and growth. Traditional businesses are still ignorant of being present online or aware of advantages that technology can reap in from scale, growth and productivity.
SMEs often shy away from using technology, especially leveraging data and insights. Do you see a change in the approach?
Emerging businesses now need to be more agile towards taking on future challenges and being responsive to their customers. Seeking real-time industry analytics can act as reference therapy for them to grow across varied industries. On the basis of our Ready Business Index survey insights, I can say that around 93 per cent customers in manufacturing segment generate huge amounts of data but still store their data in an office computer or an external drive. Fifty-four cent of transport and logistics companies are seeing a reduction in cost using our connected IoT solutions. Close to 59 per cent of IoT adopters in healthcare are using it to increase their revenue by creating new products, differentiating existing products and offering new services.
How are you targeting SMEs?
To transform Indian start-ups, we have launched Ready Start-up Kit, which is a first-of-its-kind set of solutions to empower them on their innovation and growth journey. The kit includes access to Vodafone’s Managed IoT Connectivity Service Platform that gives start-ups complete visibility, manageability, and control over various business assets, not only making it easier to implement various IoT projects but also giving the control to achieve desired business outcomes. Further to increase overall workforce efficiency we are offering a month of free trial of Vodafone Cloud store applications that not only change their communication strategy but also aid the shift in company culture.
Building the business model around start-ups is the striking feature of our partnerships with incubators like Coworks, Behive, 91 Springboard, etc. We conduct entrepreneur workshops and engagements to celebrate and connect, understand and engage with a wide range of start-ups and explore opportunities to build a relationship with them. Empowering mentorship sessions help them cross-functionally to adopt best practices in finance, HR management, legal, sales and marketing. We have powered 1,000+ start-ups already.
What are your core focus areas moving forward and how will this bring value for SMEs?
To begin, our vision is to be the most trusted and valued total communications partner. On road to SME transformation, we focus on revolutionising business models, which include solutions like vehicle tracking, asset tracking and people tracking; offering last mile financial inclusions, which includes digital wallets for small businesses for disbursement of micro loans, salary payments, incentive payments, dairy collections, etc.; and, creating cost effective acquisition channels, like Vodafone Analytics, which can help enterprises to make the right strategic decisions, generate rich insights on customer behaviour and demographics as well as to digitally engage with their potential customers.