Indian SMEs Online: Findings From a Google Survey

Indian SMEs are reaping the benefits of using the Internet medium to grow their businesses. This was revealed by a study conducted by Google India to understand usage patterns and importance of online medium amongst the SMEs in India. As per the study, over 57% SMEs said that they now use their website as a sales channel and get direct business leads from their website.

While accessing email is the #1 purpose for using the Internet for a majority of SMEs, 71% also use the Internet to search for vendors and suppliers and about 40% of them use the Internet to create online listings and advertise online.

We interacted with Nikhil Rungta, Country Marketing Head, Google India to understand the study in detail.

What was the sample size for this study?

For the purpose of this study, 785 SMEs were interviewed across India including Mumbai, Delhi NCR, Ludhiana, Kolkata, Bangalore, Chennai, Coimbatore, Hyderabad, Ahmedabad, Surat, Cochin, Pune, Nasik and Nagpur. The survey represents SMEs from various sectors including services, manufacturing and retail.

How did you define SMEs for this study?

Majority of SMEs interviewed had a turnover between 1-20 crores and organizational age between 5- 40 years. Also, in terms of In terms of employee strength, a good mix of small and large sized SMEs were surveyed, including the ones having an employee strength of less than 10 as well as those having an employee base of more than 200.

What are the findings related to Internet usage patterns of SMEs that emerge from the study?

The study shows that nearly all SMEs surveyed own PCs and subscribe to the internet. It also brings out that the advantages of having an online presence in form of a website is widely recognized by most of the SMEs. An interesting trend that emerges is that more than 50% of them see website as a sales media. They are receptive to targeted advertising opportunities focused on certain geographical locations or specific kinds of customers.

Which industries spend the most on Internet Ads / Classifieds and how much?

SMEs from Insurance, Technology B2B, IT Hardware, Travel & Tourism and Media & Entertainment extensively spend using the online medium. The average online spends for Technology B2B constitutes 43% of their total marketing budget, while SMEs from IT Hardware and Travel & Tourism spend 35% and 31% respectively.