Majority of the SMEs using internet better off in sales, profit
Updated: Aug 24, 2013 02:07:28pm
New Delhi, Aug 24 (KNN) More than 60 per cent of the small and medium enterprises (SMEs) using internet, have seen growth in sales, profits, customers and geographic reach.
According to a study titled “Unleashing Potential: The Internet's Role in the Performance of India's Small and Medium Enterprises” conducted jointly by the Nathan Economic Consulting India Private Limited (Nathan India) with the Federation of Indian Chambers of Commerce and Industry (FICCI) and Google India, 64 per cent have seen an increase in sales, 65 per cent an increase in profits, 69 per cent an increase in customers, and 63 per cent an increase in geographic reach.
The survey-based study of 951 firms in various industrial and geographical clusters across India examined how SMEs use the Internet, quantified the impact of Internet use on SMEs’ economic performance, explored why SMEs might not be using the Internet or not using it intensively, and recommends ways to promote and support Internet use to benefit SMEs and the Indian economy as a whole.
The study was conducted to analyse the economic impact of the Internet on India’s small and medium sized enterprises (SMEs).
“Controlling for factors such as investment in plant and machinery, the age, sex and education of personnel, and ownership type, using the Internet in business operations increased revenue by 51 per cent and profits by 49 per cent, the study said.
On average, an SME that uses the Internet is able to expand its customer base by 7 per cent.
An SME that adopts the Internet sees employment grow by 4 per cent and also enjoy more financial growth than those who use it less.
An SME that uses on average 10 GB of Internet data per month has 7 to 32 per cent higher revenue and 8 to 43 per cent higher profit, 13 per cent higher employment, 22 per cent higher employment growth, and 18 per cent more customers than an SME using only 5 GB.
The Nathan India study team found three main reasons why more small firms in India don’t use the Internet or use it to its full potential.
“Small start-ups are deterred by high IT equipment and connection costs, the weak environment for electronic commerce is a disincentive to adopting the Internet, and SMEs lack “digital literacy” and are unaware of the potential of the Internet and how to use it, the study concluded. (KNN/SD)
According to a study titled “Unleashing Potential: The Internet's Role in the Performance of India's Small and Medium Enterprises” conducted jointly by the Nathan Economic Consulting India Private Limited (Nathan India) with the Federation of Indian Chambers of Commerce and Industry (FICCI) and Google India, 64 per cent have seen an increase in sales, 65 per cent an increase in profits, 69 per cent an increase in customers, and 63 per cent an increase in geographic reach.
The survey-based study of 951 firms in various industrial and geographical clusters across India examined how SMEs use the Internet, quantified the impact of Internet use on SMEs’ economic performance, explored why SMEs might not be using the Internet or not using it intensively, and recommends ways to promote and support Internet use to benefit SMEs and the Indian economy as a whole.
The study was conducted to analyse the economic impact of the Internet on India’s small and medium sized enterprises (SMEs).
“Controlling for factors such as investment in plant and machinery, the age, sex and education of personnel, and ownership type, using the Internet in business operations increased revenue by 51 per cent and profits by 49 per cent, the study said.
On average, an SME that uses the Internet is able to expand its customer base by 7 per cent.
An SME that adopts the Internet sees employment grow by 4 per cent and also enjoy more financial growth than those who use it less.
An SME that uses on average 10 GB of Internet data per month has 7 to 32 per cent higher revenue and 8 to 43 per cent higher profit, 13 per cent higher employment, 22 per cent higher employment growth, and 18 per cent more customers than an SME using only 5 GB.
The Nathan India study team found three main reasons why more small firms in India don’t use the Internet or use it to its full potential.
“Small start-ups are deterred by high IT equipment and connection costs, the weak environment for electronic commerce is a disincentive to adopting the Internet, and SMEs lack “digital literacy” and are unaware of the potential of the Internet and how to use it, the study concluded. (KNN/SD)
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