Indian SMEs Prefer Web Channels for Sales: Google India Survey

Indian SMEs are now using the Internet to grow their businesses and have left behind traditional media like newspaper ads and outdoor ads to a large extent, according to a Google India survey.

Currently, more than 57 percent SMEs use their website as a sales channel and get direct business leads from their website.

Amongst the SMEs who have an online presence, 56 percent of them said Internet is a cost-effective medium as compared to print and television. About 79 percent of SMEs says that Internet advertising provides a better reach.

SMEs with a marketing expenditure ranging between 25-70 lakhs ($54,759-$153,325) per annum spend a larger sum of money on the online medium and avoid relying on traditional media.

However, the majority of the expenditure (43 percent) comes from SMEs who spend between 12 and 25 lakhs ($26,284 and $54,759) on advertising on an annual basis, reflecting the low cost benefit of the Internet.

The SME business market of India is large and bubbling with newer opportunities which may result in SMEs taking the place of the next generation cash cow, according to Google (News - Alert) India survey.

Increased purchasing power and consumerism is what drives the business scenario in India. Thus, there is an opportunity for competitive advantage that can benefit investors and entrepreneurs to a large extent.

“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,” said Sridhar Seshadri, head of Online Sales, Google India, in a statement. “In the last two years we have seen a significant increase in the number of businesses that have started to advertise online.”

About 62 percent of the SMBs say the percentage of Internet spends in the total advertising budget will increase significantly in the future.

SMEs are trying to enhance their online presence. Companies in this category are one of the key growth drivers for Google India.

Recently, Google announced that it is planning to expand in nearly 30 cities across the country by offering services in eight regional languages within a year to cater to the needs of small businesses.