Digital adoption is the process of incorporating digital technologies and tools into the existing operations of a business. In recent years, widespread digital transformation has completely revolutionised how businesses operate. From small businesses to large multinationals, digital adoption has enabled companies to move beyond traditional business models and leverage technology to scale their businesses. This includes using cloud computing, artificial intelligence, machine learning and blockchain technology. Fortunately, digital adoption can help MSMEs quickly and cost-effectively scale their operations.
Indian MSMEs are rapidly migrating from offline to online and adopting technology to improve their operations and increase efficiency while providing timely customer service. This trend is expected to further take shape in 2023, which will help MSMEs reach an even wider customer base, streamline their processes, and reduce costs.
Digital adoption also enables MSMEs to stay competitive in the digital age. By utilising innovative solutions and embracing digital transformation, MSMEs can increase visibility, facilitate better communication with customers, speed up transactions, etc. For instance, businesses can use social media platforms to reach new customers and create a stronger online presence. In this article, let’s explore the 3 Digital Adoptions that can help MSMEs scale their business.
The e-Invoicing, or electronic invoicing system, was introduced in 2020 under the Goods and Services Tax (GST) law. It is an innovative digital solution that helps to streamline the process of sending and receiving invoices. E-invoicing helps businesses to manage their invoices with an easily accessible and secure digital platform. The use of e-invoicing allows businesses to reduce the amount of paperwork associated with invoicing, saving time and money.
MSMEs that haven’t already done it can implement e-invoicing in 2023 to reduce mismatch mistakes in data reconciliation between sellers and purchasers under the GST Input Tax Credit system. This can be especially beneficial as invoices can be easily reviewed and validated before sending them out. In addition, e-invoicing can eliminate fake GST invoices and also helps to improve communication between businesses and their customers, as invoices can be sent directly to them via email or text.
E-invoicing can also help MSMEs to improve their visibility and transparency in the digital space. By providing easy access to invoices, small businesses can ensure that customers can keep track of their transactions. Moreover, e-invoicing also helps businesses manage their finances better, as they can keep track of their spending and make sure that their invoices are paid promptly. From 1st October 2022, the Government of India made e-invoicing mandatory for businesses with a total annual turnover of more than Rs.10 crores in any previous financial year from 2017-18 to 2021-22.
Integrating digital tools into operations can help MSMEs access additional resources and expand their reach. For example, businesses can use e-commerce platforms like MSME Global Mart to reach customers beyond their local area and sell products online. Selling through platforms or e-commerce portals plays an important role in MSMEs' growth. Small businesses can display or sell their products anywhere in the world using e-commerce without moving. E-commerce platforms drive MSMEs' growth and development at low costs, low investments, and high levels of innovation. According to the MSMEs Go Digital report from ICRIER, a very small percentage of MSMEs have their own website since that requires a larger investment, both in terms of time and cost; thus, most MSMEs are dependent on e-commerce platforms for their online sales. A report from the consulting firm Bain & Company and the venture capital firm Accel states that more than 15 million MSMEs would buy and sell online, up from the current 6 million, and will also create 7 million jobs, up from the present 3 million by 2027.
MSMEs can also register for MSME Global Mart, a Business to Business (B2B) platform that facilitates MSMEs with the ability to connect and market themselves. Small businesses can use it to increase their internet presence, connect with customers and suppliers, find trade leads, and receive infinite tender alerts based on keywords. The services offered by MSME Global Mart are designed to support MSMEs at every step of the business cycle and raise the visibility of their products globally by providing value-added services and pertinent information.
India has been adopting digital payments at a rapid pace over the last few years, and the ecosystem will continue to grow in the coming years too. The digital payment ecosystem can unlock massive value for MSMEs in 2023 by helping them reduce inconvenience to their customers and suppliers, reduce the administrative burden on their business, and minimise the risk of losing essential records. This may include using mobile payments, such as Google Pay or Phone Pay, or digital wallets, such as PayPal or Paytm. Businesses should also invest in digital payment infrastructure that is secure and reliable, as well as a customer service system that can support digital payments. This will help them make the most of opportunities, gain an advantage over competitors and ensure that customers have a positive experience when making digital payments.
Digital Payment provides consumers with contactless and cashless payment methods, which helps MSMEs with easy record-keeping, convenience, and relatively inexpensive adoption. The volume of digital payments of MSME has been increasing yearly, with 7422 crore transactions in FY 2022, up by 33% from FY 2021, according to the Ministry of Electronics and IT (MeitY). The comfort with digital payments has been rising up, with UPI being the most popular mode, particularly among MSME customers.
Finally, businesses should also consider educating their customers about the benefits of digital payments. By explaining the convenience, security, and speed of digital payment systems, businesses can encourage their customers to adopt these systems. Additionally, businesses should ensure that their customers have access to the necessary tools and resources to make digital payments. This will help to ensure the successful adoption of digital payments in the long term.
Over the past few years, the MSME sector in India has demonstrated enormous growth potential. Therefore, the Government of India has introduced the Digital MSME scheme to make MSMEs digitally empowered. Let’s dive deep into the Digital MSME scheme and its benefits to MSMEs.
MSMEs will acquire a competitive advantage over their rivals as they advance along their path of digital technology. Small businesses can improve their competitiveness in domestic and global markets by adopting digital tools, applications and technologies in their production and business processes.
MSMEs face several challenges when it comes to scaling their businesses. These include limited resources, a lack of access to certain technologies, and a need to stay competitive in an ever-evolving digital landscape. Fortunately, digital adoption can help MSMEs overcome these obstacles and scale their business. Here’s how:
Digital adoption can help MSMEs increase their visibility, as digital tools enable businesses to reach more customers and markets than ever before. From social media platforms to search engine optimisation, digital adoption can help MSMEs expand their reach and attract new customers.
Digital adoption can help MSMEs streamline existing processes and make operations more efficient. From cloud computing to automated tools, digital adoption can help MSMEs reduce costs and make their businesses more efficient.
Digital adoption can help MSMEs gain a competitive edge by staying ahead of the curve. By leveraging the latest trends and technologies, businesses can remain competitive and be better positioned to capitalise on opportunities.
Digital adoption can also help MSMEs access resources that would otherwise be unavailable. From data analytics to cloud computing, digital adoption can help businesses gain access to the tools and technologies they need to scale their operations.
Last but not least, digital adoption can help MSMEs save money. Businesses can reduce costs and increase their bottom line by leveraging digital solutions.
Digital adoption is a growing trend among MSMEs looking to scale their business in 2023 and the years ahead. CRISIL reports that 53% of SMEs and 47% of micro-enterprises in India adopted digital sales platforms against the pre-COVID figure of 29%. Another survey by the Endurance International Group reveals that 50% of MSMEs incorporated technologies like WhatsApp and video conferencing tools for daily business operations. Turning to digital tools can help small businesses gain a competitive edge and stay ahead of their competitors.
Embracing digital transformation is an effective way to reach a broader audience, increase efficiency, reduce costs, and improve customer service. By utilising digital solutions, MSMEs can increase their visibility, streamline processes, and gain access to resources they would otherwise be unable to access. However, many MSMEs struggle to access the necessary funding to transition. This is where Non-Banking Financial Companies (NBFCs) come in. NBFCs like Kinara Capital provide financial services, including business loans for MSMEs to make the digital transformation. This can involve investing in new technology and training staff on how to use the new technology.
Kinara Capital is a valuable resource for MSMEs looking for a digital transformation. With the right funding, advice and guidance, MSMEs can make the transition much smoother and more successful. Kinara provides MSMEs with access to personal customer service and a fully digital process through the multilingual myKinara app. It offers fast and flexible disbursement of collateral-free business loans within 24-hours through an end-to-end digital process with minimal documentation. MSMEs can avail of Rs. 1 lakh to Rs. 30 lakhs of Working Capital, Asset Purchase, and Bill Discounting business loan from Kinara through various channels, including downloading the app and approaching a representative at one of 133 branches. Women entrepreneurs qualify for an automatic discount with the HerVikas program on all business loans.
So, what are you waiting for? Take the first step of building an inclusive, efficient, and profitable digital future by applying for an unsecured business loan from Kinara Capital. You can also give a missed call at 080-68264454 to talk to our in-house customer support team or reach us at our toll-free number 18001032683.