The tech decade: How tech startups are enabling SMBs in India growth story

Small and medium businesses (SMBs) are a key driver of the India growth story, playing a pivotal role in promoting industrialization and providing employment in rural areas. In the past few years, catalysed by the pandemic, SMBs have witnessed massive growth in terms of technological adoption fuelled by technology startups.

In a post-pandemic world, India has created a distinct digitalisation model, supported by a strong “India Stack” which comprises technology startups aiming to empower SMBs and government fintech initiatives which are a public utility and are highly inclusive. The India Stack led by Goods and Services Tax (GST), Udayam registration, Aadhar-enabled payment system, biometric KYC, cloud document storage has changed how India manages compliance, makes payments and most importantly benefits from public and private sector initiatives promoting SMBs.

The new India tech story
This India stack that has taken digitalization to the hinterlands has encouraged SMBs to look for tech solutions for everything. State-of-the-art technology such as machine learning, artificial intelligence, financial accounting, augmented reality and data analytics have empowered SMBs.

From automating daily operations, financial accounting and generating analytics on a daily basis, to enhancing productivity and upscaling to innovate, tech start-ups have handheld SMBs through it all.

Billing and accounting software like myBillBook allow SMBs to automate and digitise GST billing, e-Way billing, e-Invoicing, inventory management, payment collection-reconciliations, reminders, access to their financials and gain real-time insights for better decision making. Technologies which are mobile first, user and pocket friendly are helping SMBs become ‘Aatmanirbhar’ and less dependent on accountants to fulfill GST requirements.

What the future holds
This paradigm shift enabled by tech start-ups is fueling the confidence of SMBs to conduct business anytime, anywhere. Analytics-driven consumer experiences, digital payments and hyper-local logistics are enabling further innovation and laying a path for improvement in productivity which directly translates into business growth.

As SMBs and their workforce hone their skills in digital invoicing, online transaction processing, supply chain management, and inventory management systems to mention just a few tech-led services, it is estimated that the Indian Software as a Service (SaaS) market will grow significantly and boost its share of global SaaS from 1% currently to an estimated 4-5% by 2030, leading to a revenue opportunity of $50-70 billion for the country. Thus, it is evident that the India SMB growth and the tech story are going hand in hand to bring about unprecedented success in India.

Rapid digitalisation over the pandemic years have made SMBs dynamic and ready to upscale. Over the next few years the following technologies propelled by tech companies will catapult SMBs in the next trajectory of growth. These will include: .

Growing need for full stack data platforms - Instead of isolated data solutions, SMBs are seeking the assistance of tech start ups to build entire data stacks, right from business operations like invoicing to collection to analytical dashboards that will help them have all their business data on their mobile screens in one single click. This is empowering small business owners to be in total control of all their financial data and optimize resources better for growth. These solutions are gaining appreciation and adoption because they help reduce errors and also improve productivity.

The power of marketing - Marketing reports estimate that 96% of SMBs use platforms like social media and WhatsApp to communicate with existing and potentially new customers. Facebook Ads have been most useful, given their wide reach in Tier II and Tier III cities and small towns of India. Facebook has included many features to help SMBs grow like dynamic language optimizations, multi-city targeting and cross border insights among others. Recently added Communities feature on WhatsApp, WhatsApp for Business, bots and payments are all due to see more usage by SMBs as an effective marketing tool.

Financial API infrastructure - Complex banking and financial systems have typically intimidated and eluded SMBs. Fintech start-ups have broken this notion and are making it easier for SMBs to plug into these banking channels for easy account management. Going ahead, SMBs will continue to innovate with tech companies to build products on top of these APIs to make inroads into the financial systems

Customized ML solutions - Tech companies help SMBs go hyperlocal and offer specialized solutions to cater to niche use cases. Machine learning APIs have now begun to generate content to provide personalized recommendations for SMB customers and even help in fraud detection. This level of personalization, will help SMBs in clear targeting of their customers and move ahead.

According to a recent report by Morgan Stanley India is going to account for a fifth of the total global economic growth over the next decade. Undoubtedly, SMBs will play a pivotal role in propelling India’s growth with tech start-ups being efficient enablers in their journey of growth.

-- Aditya Naik, Co-Founder & Chief Business Officer at FloBiz.