Indian SMEs get net savvy

As per the study,over 57 per cent of SMEs said they now use their website as a sales channel and get direct business leads from their website.

While accessing email is the number one purpose for using Internet,a majority of SMEs (71 per cent) also use it to search for vendors and suppliers and about 40 per cent use the Internet to create online listings and advertise online.

In terms of mediums used to advertise,traditional media like newspaper ads and outdoor ads still lead advertising spends for SMEs,but Internet is emerging as one of the fastest growing medium for advertising with 58 per cent of SMEs with websites using the Internet to generate business leads.

Among SMEs who have a online presence,56 per cent feel the Internet is a cost effective medium compared to traditional advertising medium like print and television and 79 per cent believe Internet advertising can provide greater reach.

A closer analysis of marketing spends of SMEs reveals that SMEs with marketing spends between Rs 25 lakh — Rs 70 lakh per annum tend to spend higher on the online medium and rely less on traditional media like print and television.

But majority of the spends (43 per cent) comes from SMEs who spend between Rs 12 to Rs 25 lakh on advertising on a annual basis,reflecting the low cost benefit of the Internet.

Sridhar Seshadri,Head of Online Sales Google India said,“While the absolute number of SMEs with an online presence is very low compared to actual businesses in India,we’re pleasantly surprised to see increasing understanding amongst Indian SMEs to use the web for business growth”. “In the last two years we have seen a significant increase in the number of businesses that have started to advertise online. But with over 35 million SMEs in the country,we have a long way to go. Google India is working on a number of programmes to educate more SMEs on how they can get online and use the Internet as a primary sales channel”,he said.

Among all SMEs surveyed,SMEs from Insurance,Technology B2B,IT Hardware and Travel & Tourism spend around 30-45 per cent on online marketing.

Annual average online spends are high among SMEs from media & Entertainment,Gems and Jewellery and Apparel. Additionally,Banner/Display Advertising and E-mail Marketing are the most popular form of Internet advertising and 30 per cent SMEs use search engine advertising to market products and services.

For the study,785 SMEs (owners or marketing heads) were interviewed across India,including Mumbai,Delhi NCR,Ludhiana,Kolkata,Bangalore,Chennai,Coimbatore,Surat,Hyderabad,Ahmedabad,Cochin,Pune,Nashik and Nagpur.