How technology is facilitating the digitisation of small businesses in India


By Kirti Varun Avasarala Chief Product Officer at Meesho

During the past decade, Digital India and other initiatives have incentivised individuals and institutions to adopt digital practices, resulting in seamless and transparent e-commerce transactions. Initially, however, there was reluctance to embrace digital due to low awareness and concerns around safety and security, including apprehensions about making online payments.

Demonetisation in November 2016 proved to be an inflection point for digital payments with nearly 86% of the currency going out of circulation overnight. Enterprises, large and small, realised the critical importance of deploying digital solutions to maintain business continuity. 

After the Goods and  Services Tax was introduced in 2017, digitisation received another boost. But the biggest push came from the nationwide lockdown in March 2020. With most people (except essential services workers) staying indoors, remote work, digital operations and ecommerce kept the economy’s engines running. 

Role of Reforms and Technology Drivers

As the safety, convenience and cost-effectiveness of digital became clear, people pan-India ordered everything online, overcoming their earlier fears. Consequently, e-commerce companies were one of the biggest beneficiaries of the digital shift, with their business growing rapidly. 

Apps have played a key role in facilitating smooth transactions, from discovery and purchase of goods to online payments. Rising internet connectivity in tier 2+ cities has given a fillip to the entire e-commerce industry. The growing usage of convenient and cost-effective last-mile delivery apps is also boosting online sales in these markets, where multilingual apps are key growth drivers.

There is enough research now to demonstrate the benefits of technology adoption for businesses. A BCG report reveals that, unlike low-tech SMEs, businesses leveraging  technology solutions registered higher growth in job-creation and revenue by 10 points and 11 points last year, respectively. Similarly, a Google-KPMG study notes that digitally empowered SMEs project almost double the revenue growth compared to their offline counterparts. 

Thanks to the ease of digital payments, sellers in metros and non-metros  can market their products across India. Therefore, most retail sellers/resellers are registering with e-commerce platforms to sell their merchandise across the country. 

Evolving Trends and Digital Tools

Consumers now shop 24×7, since specialised help is always available from the support staff of e-commerce companies through AI-enabled chatbots and automated customer service. The emergence of millennials, Gen Z and other tech-savvy cohorts has opened new business avenues for e-commerce players. 

Given the evolving trends, companies are investing more in tech solutions that enhance consumers’ post-purchase experience by streamlining supply chains and improving accessibility and delivery times. Convenient last-mile deliveries are being facilitated even in remote regions at cost-effective prices. 

These opportunities are being leveraged via emerging technologies like artificial intelligence, machine learning, augmented and virtual reality, blockchain. For example, automation, AI, ML and data analytics help in gleaning insights about consumer habits, behaviour and likely trends from captive customer data. Furthermore, retailers are using AR and VR to provide prospective customers with an immersive shopping experience via virtual showrooms and trial rooms. As customers “try” garments from the safe confines of their homes, AR/VR tools are helping them buy the right clothes, in turn reducing merchants’ return and refund rates. 

Software Services and More

Even SMEs are using predictive and big data analytics to better understand customer habits to provide bespoke products and customised services. Small companies lacking the wherewithal to invest in digital technologies are turning to SaaS (software-as-a-service) providers. SaaS companies help them create product catalogues and digitise their inventories at modest monthly fees. Some organisations are creating solutions specifically for SMEs at affordable price points. 

Moreover, digital technology is providing end-to-end solutions for SMEs to upscale and integrate their services into the online ecosystem. Be it digitising consumer communications, managing finances or billing of various operations, SaaS firms provide an array of services. 

Currently, the retail industry’s contribution to India’s GDP is around 10% even though 90% of the market remains unorganised. In a nation of nearly 1.4 billion people with almost 65% residing in rural regions, online shoppers number barely 70 million. As smartphones and 4G increase their rural penetration, and with the advent of 5G around the corner, Bharat is an enormous retail opportunity waiting to be tapped. tDigital technologies will not just open this huge market, but also transform the lives of consumers, small retailers and SMEs, while offering value-for-money products and services through e-commerce platforms. The  absence of modern retail infrastructure in rural regions offers e-commerce companies an excellent opportunity to scale up business and capture greater market share, 


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