Over the last few years, India has seen a significant growth in small and medium enterprises (SMEs). These enterprises are important for the economy and contribute to its growth.
With access to digital media and Internet, the customer base is seeing a shift. There are more than 426 million Internet users with almost 72% less than 35 years old. Additional growth is expected from rural users with an estimated 280 million users in 2018.
The consumption pattern is also seeing changes. Here are seven trends to look out for in 2018.
Growth in tier II and III locations
An increasing number of SMEs are starting in tier II and III locations. With the availability of small business loans and increasing awareness and support, such locations will drive SME growth.
By 2018, it is expected that millennial will have maximum spending capacity. They have a different viewpoint and actively use digital content. The resulting media shift will encourage SMEs to move towards social media and other methods to reach to the millennial generation.
Easier access to finance
A major hindrance to the growth of SMEs was access to quick business loans in India. However, the growth in the FinTech industry, easier and affordable financing options are now available to SMEs. Improved technology, enhanced customer servicing, analytics, and automation will make it easier for SMEs to access capital finance.
Increase in B2B online markets
E-commerce is gaining popularity with more B2B marketplaces. Although this industry is in a nascent stage in India, there is a huge potential for growth. Online B2B marketplaces connect suppliers and buyers to satisfy their requirements. As a result, SMEs are able to overcome geographical and technical limitations. In addition, to affordable business loan interest rate, enterprises are able to procure raw materials at lower prices allowing SMEs to compete with the larger companies.
Big data to drive growth
SMEs are inhibited by the complexity of big data comprising huge datasets. However, calculated usage of such information enables SMEs to grow. Several lenders offer SME finance to allow enterprises to invest in big data analytics for their growth.
Artificial intelligence (AI)
AI is expected to gain high importance by 2020. Several small businesses use AI strategy to procure information. It is expected that enterprises will avail business finance to invest in AI.
Managing business leads
SMEs explore different channels to discover new business leads. They may spend on lead generation but may find it difficult to manage and track the leads. Enterprises may invest in lean customer relationship management (CRM) solutions through SME loans to improve their business operations.
India has moved ahead in global ranking as far as the ease of doing business is concerned. This bodes well for the SMEs that will boost their growth in 2018. If you want to start your business, you may apply for a business loan that is offered by financial institutions.