Go Digital, or Perish: SMBs say digital presence key to survival as inflation bites
Small and midsize businesses (SMBs), which account for a majority of businesses worldwide, play a major role in national economies. As important contributors to job creation, the optimistic perspective towards the economy they operate in, despite the risks from the pandemic and inflation, speaks volumes of their resilience and the contribution to keeping the economy buoyant.
However, to tap new revenue streams, reduce costs, and engage with consumers, SMBs now are convinced that digital adoption is the key to survival in the new normal.
Nearly 80% of SMBs across US, India, Australia, and New Zealand agree the rising costs of business is due to inflation. There is high awareness that a digital presence is the key to survival in the new normal, led by SMBs in India at 83%, 67% in the US, and 60% of SMBs in Australia and New Zealand, reveals a global survey by web hosting provider Bluehost.
The SMB study, conducted annually by Bluehost on World Micro, Small and Medium-sized Enterprises (MSMEs) Day celebrated every year on June 27, assesses the sentiment towards digital adoption for business promotion and growth.
Benefits of online selling
Selling online drives growth, say 73% of SMBs in the US, 75% in India, 59% in Australia, and 50% in New Zealand. SMBs also confirm that selling online helps reduce cost pressures, with nearly half of SMBs surveyed across the US, India and Australia have experienced cost reductions.
However, while 80% of SMBs that have a domain name have a business website, selling online is yet to be embraced fully.
Out of all SMBs that have a website, only 21% in Australia sell online, 22% in India and 16% in New Zealand.
The US has the highest share of SMBs that have a website and sell online, at around 25%.
SMBs know that selling online will be key to growing their businesses in the new normal and intend to start selling online in the next 12 months. SMBs in India intend to embrace online selling the most at 42%, followed by SMBs in the US at 33%, Australia at 24%, and New Zealand at 18%.
How SMBs can harness digital tools in operations
To make business operations more professional and customer-centric, SMBs are adopting digital tools in their daily activities with clients.
More than 80% of the SMBs are currently using business email. This is followed by usage of social media at 56%. In the US, usage of business email (77%) and social media (71%) is very high.
A similar ratio of SMBs use video conference, digital marketing and online marketplaces, especially in India and Australia, with India leading in the usage of WhatsApp (72%) and the use of online marketplaces (44%).
WhatsApp usage is relatively lower in Australia (26%) and New Zealand (23%).
Managing transactions at a distance
On business transactions, approximately one third of SMB respondents have contactless payment options in all the markets.
In India, nearly 80% of all payments being accepted are through a digital method, while in the US, 38 % say that credit cards are the most preferred payment option.
BNPL (Buy Now Pay Later) services is another method of payment that is nascent but is becoming popular amongst SMBs in New Zealand (8%), Australia (4%), and the US (3%).
“SMBs are major drivers of both economic growth and social development, as they foster competition and innovation. The COVID-19 crisis has pushed SMBs to promote and grow their businesses online and now with inflationary headwinds, SMBs continue to show remarkable resilience,” said Mitika Kulshreshtha, vice president of marketing at Newfold Digital, parent company of Bluehost.
How do SMBs see economic conditions
Given inflationary pressures are high, only 15% of respondents in the US showed a positive outlook about the country’s economy.
The sentiment was more positive in Australia and New Zealand, where 33% expressed a positive outlook. In India, 69% of respondents were positive about the country’s economy in the next 12 months.
Despite varying levels of confidence, SMBs across these regions say that their country is a good hub for doing business.
In the US, 62% of SMBs give their country a thumbs up, along with 60% in Australia, 53% in New Zealand, and 80% of SMB respondents in India.
Bluehost administered an online questionnaire to SMBs across the US, India, Australia, and New Zealand. Of the 1,314 responses received, a majority of the respondents were from industries including consulting, training, professional services, manufacturing, health and social services, educational services, and retail.