Most of India’s small businesses are largely ‘invisible’ online or have a marginal digital footprint, according to a survey released by RedShift Research and GoDaddy, the world’s largest technology provider dedicated to small businesses. The survey reveals that as many as 63 percent of India’s small businesses don’t have their own website, with 40 percent stating that their company is just too small to warrant a website. Other reasons for not having a website include lack of technical expertise (19 percent), affordability (17 percent) and that their social media presence meets with current needs. The survey, based on a poll of 500 very small businesses (defined as five workers or less), takes a look at how small businesses in India starting to utilize the Internet and their expectations from going online.
Estimated at 51 million, India is home to the world’s second largest base of small and medium-sized businesses (SMBs), accounting for more than 17 percent of the country’s GDP. If leveraged well, an effective online presence has the potential to be a strategic asset and a harbinger for future growth for these businesses: from helping to expand their footprint from hyperlocal to Pan-India, and even global or to growing customers incrementally. This is not an unrealistic expectation and of those respondents who already have a website, 63 percent say their business grew once they their website was up and running, with nearly a third witnessing growth in excess of ten percent.
“It is clear that there is an emerging digital economy in India and small businesses can have significant opportunities to grow if they take to the Internet. An online identity is critical for their long term business growth and expansion”, said Rajiv Sodhi, Vice President, GoDaddy, India and Australia. “Our aim is to educate small businesses on the benefits of establishing an online presence, while making it affordable and easy for them to build an impactful global online identity.”
While a majority of Indian small businesses are yet to create a website, the research found that size and age does not matter when it comes to a small business thinking of or planning to be website ready. Newer small businesses are just as likely to create a website in the next two years as their older counterparts (79 percent have been in business for three or less years compared to 72 percent of those in business four or more years). And one-person shops (70 percent) are marginally less likely to build a website in the next two years than firms of 2-5 people (79 percent).
Great Growth Expectations
A majority of small businesses feel that having their own distinctive online presence will significantly boost growth by making their businesses visible. More than half of those who plan to build a website within the next two years expect their business to grow by anything from 10 to 50 percent within a short 3 to 5 years of building their website. Not surprisingly, businesses with no plans to build a website (in the next two years) have lower growth expectations with just 45 percent saying they will grow 10 to 50 percent in a similar timeframe.
Increased customer base
A sweeping majority of small business owners in India affirm that creating a website will increase their visibility online and customers will be able to find them easily. A marginal 12 percent state that a website will not have much impact on their customer base. Interestingly, email and telephone remain vital tools of communication with customers, with email marginally displacing communication through phones by two percent, indicating an increased propensity to use email marketing tools among small businesses.
The rapid growth of ecommerce in India is encouraging more and more small businesses to sell online. The survey reveals that most (77 percent) small business owners with plans to create a website aspire to have either ecommerce functionality or an online store front soon after they have a live website (from the time they go live to anything from a year to two years out). Underscoring the importance of mobile, a staggering 91 percent think that having a mobile friendly website is important to their business success.
Lack of awareness
While small businesses have a clear understanding of what an effective online presence can do, few realize the importance of, or have taken steps, in choosing the right domain name for their business. A relatively small 15 percent of business owners with plans to create a website within the next two years actually own a domain name. Domain penetration continues to remain low in India and potential website owners looking to build a differentiated proposition need to act fast in securing a befitting name or identity online.
India has a long way to go before it evolves from a ‘do-it-for-me’ market to a ‘do-it-yourself’ one unlike other countries. Confirming this trend is the current thinking on how small businesses are choosing to acquire a website presence. Thirty percent are looking for an internet company to build and manage their website for them and 24 percent of respondents are looking for help from a professional web designer. Only 20 percent plan to build their website on their own. Often enough is building a website to get an effective online presence is complex to intimidating for some.
“The takeaway from this research is that the final frontier of e-commerce – the small businesses – seem finally poised to take a leap that many have already taken,” added Mr. Sodhi. “When they do, this research shows it’s likely to change their businesses: grow their revenues, expand their customer base and alter how they interact with customers. When you consider how many very small businesses there are in India, those changes could have a profound impact on the economy and the way the businesses operate.”
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