Internet could boost SMEs revenue and profits, says FICCI-Google study

Chennai:

Internet could be a game changer for small and medium enterprises (SMEs) in India as it could help boost SME’s revenue and profits, according to a survey.

The study done by FICCI in partnership with Google revealed that on an average, an SME adopting the Internet is able to grow its customer base by 7 percent and generate employment growth by 4 per cent.

The report, compiled and presented by Nathan Associates, showed that SMEs, who use the web, fare much better than those that do not. On an average, web-enabled SMEs boasted revenues 51pc higher, 49pc more profit, and customer bases 7pc broader than their offline-only counterparts.

The study said that Internet can be a great equalizer for SMEs, providing them with access to new markets, more customers and visibility so as to unleash their potential.

The survey of 951 small and medium enterprises in various industrial and geographical clusters across India shows that SMEs that use the Internet, 69 per cent experienced an increase in customers, and 63 per cent an increase in geographic reach and 44 per cent saw an increase in firm employment.

Controlling for factors such as an SME’s investment in plant and machinery, the age, sex and education of personnel, and ownership type, the study found that using the Internet for business operations increased the SME’s revenue by 51 percent and profits by 49 percent.

The perceived benefits of using the Internet are significant: 64 percent of respondents reported an increase in sales due to Internet use, 65 percent an increase in profits, 69 percent an increase in customers, 63 percent in geographic reach and, 44 percent in employment.