SME sector poised for boom

The small and medium-sized enterprises (SME) sector in India has gained significant growth over the years owing to various factors like increasing awareness, digital advancements and better opportunities that have encouraged many entrepreneurs to stun the market with their unique offerings.

The immense potential within this space has aided many SMEs to emerge as success stories and shoulder the responsibility of India’s economic and social development. This is reason enough for growth enablers across the country to focus on empowering this sector, and help accelerate its growth.

Going by such positive facts, let us look at the upcoming trends that are expected to dominate the SME sector in 2017:

B2B segment to gain momentum: Nowadays, several SMEs have begun to make the most of the B2B e-commerce space, and are playing a key role in transforming this space for the better. One of the biggest reasons why this trend is gaining momentum lies in greater adoption of innovative technology that is facilitating the growth of SMEs across a wider margin.

With the sector projected to be worth $25.8 billion and becoming a strong market for emerging technologies within the next three years, the B2B e-commerce space stands to gain more prevalence in 2017.

Implementation of GST: The implementation of the Goods and Services Tax (GST) will perhaps be one of the best things to have happened to the B2B based e-commerce businesses. The early implementation of the bill in a more inclusive format addressing tax collection at source, treatment of refunds, cancellations etc, at the time of transaction should make it a more beneficial affair.

Furthermore, mandatory adoption of newer technologies to comply with the GST system can prove to be another boon for the SME sector as it could help in automation of various business operations, thereby, aiding efficiency and subsequent increase in productivity.

Utilisation of e-commerce platforms for business growth: According to a report by KPMG, more than 85% SMEs that use e-commerce for business growth, believe it to be one of the most cost-effective channels that significantly propelled their sales growth.

The survey also suggested that such companies witnessed a 51% increase in revenues, 49% increase in profits. Going by these figures, it is evident that e-commerce will continue to witness greater utilisation by SMEs to augment their business reach in 2017.

Increase in m-commerce: The rapid increase in smartphone users has contributed in accelerating the growth of m-commerce.

It is also driving several SMEs to simultaneously adopt both mobile based and web-based technologies to exp­and their business across multiple platforms, ushering in a new trend of Mobility-Analytics-Cloud & Social (Macs). This gradual shift from Social-Mobility-Analytics & Cloud (Smacystem is expected to be one of the most trending aspects within the Indian SME sector in 2017.

Better access to finance & credit instruments: So far, the lack of financial aid and/or credit instruments has been a major constraint for growth of SMEs. However, with more and more fin-tech players stepping in to alleviate this issue, the loaning process for small businesses is gradually becoming easy and more accessible. Some industry reports also suggest that 2017 will experience a surge in NBFCs, with special focus on online platforms.

Digitisation of SMEs
Following the demonetisation move last November, efforts to introduce cashless money and digital payment services across businesses has intensified, leading many SMEs to explore business opportunities online.

The push towards digitisation is also enabling SMEs to reach out to prospective clients without the limitation of geographical boundaries, further helping their businesses grow across a wider margin.

Apart from the above-mentioned trends, various market segments across multifarious industries are expected to gain prominence during the current fiscal year. Some of the most trending segments for 2017 are: Home supplies, agriculture, apparel and fashion, food and beverages, industrial supplies, industrial machinery, chemical, construction, packaging and paper, and mineral and metals.

While the facts mentioned above are predictions based on current market developments and consumer demand, it is evident that these trends hold immense potential, and will cert­ainly be one of the most important factors driving the gro­wth of the SME sector in 2017.

(The writer is Founder & Director, ExportersIndia.com)