CPA Australia: One-third of Indian small businesses turn to technology to combat COVID-19

• Indian small businesses are more
  confident than their Asia-Pacific counterparts.
• Investment in technology helped combat
  the impact of COVID-19 and increase profitability.
• Nearly two-thirds
  of Indian small businesses grew in 2020 and most expect to grow this year.
• Indian small businesses were most
  likely to seek external finance in 2021.

 

NEW DELHI, INDIA – Media OutReach – 22 April 2021 – Nearly
two-thirds of Indian small businesses experienced growth in 2020 through
technology investment and adoption. They maintain a confidant outlook despite
the impact of COVID-19, according to CPA Australia‘s
2020-21 Asia-Pacific Small Business Survey.

 

The survey canvassed 4,227 small
businesses in 11 markets across the Asia-Pacific region, including Australia,
Mainland China, Singapore and Vietnam. Five hundred and twelve participants from
Delhi/Gurgaon, Mumbai, Chennai, Bengaluru and Hyderabad in India participated
in the survey.

 

Sixty-five per cent of Indian small
businesses reported growth last year, the highest survey result. Reflecting
this finding, 56 per cent of respondents increased staff numbers and 58 per
cent sought external funds for business growth; both results were the highest
in the survey.

 

“Indian small businesses outgrew their Asia-Pacific
counterparts last year. However, small business growth varied widely in different
cities. Delhi/Gurgaon recorded extremely positive results but other cities like
Mumbai were below average,” said Mark Chau, Regional General Manager of
Business Development International at CPA Australia.

 

“The recent wave of COVID-19 infections may weigh on small businesses’
growth prospects and confidence. However, India’s
small businesses have demonstrated the necessary resilience to rebound once
infection rates are brought under control.”

 

The survey showed that high growth small
businesses are more likely to invest in new technologies and Indian small businesses
demonstrated they are the region’s leaders in this field.

 

Despite one half of Indian small businesses indicating
that they were negatively impacted by COVID-19 in 2020, many took decisive
action to combat the adverse effects of the pandemic. Thirty-three per cent
increased their investment in technology in response to the pandemic, the highest
of the markets surveyed. Seventy-six per cent reported
that their investment improved profitability, which is the second highest of
all markets.

 

The technologies most popular among India’s
small businesses were Customer Relationship Management (CRM) software and
business intelligence and analytical software.

 

“Indian
small businesses are ambitious, forward-looking and
focused on their customers. Many turned to technology to improve
customer satisfaction and business strategy last year.

 

“In a post-COVID era, the ability to identify and invest in suitable
technologies to improve business efficiency and profitability will be critical
for small business success. India’s youthful small business sector has proven
it has this savviness
in abundance,” Chau said.

 

Respondents identified cashflow difficulties
(37 per cent) and increasing costs (32 per cent) as obstacles to growth. Eighty
per cent of Indian respondents sought external finance in 2020, the highest
result of the survey. Unlike other surveyed markets, Indian small businesses were
the least likely to access external funds from a bank (11 per cent). Many
instead preferred to seek funds from Non-Banking Financial Companies to address
their liquidity stress (36 per cent).

 

“Easy access to external finance encourages
small businesses to keep investing in technology, offering more jobs and
expanding abroad. Indian small businesses should strive to grow sustainably by managing
their cashflow closely while balancing expenses from business expansion,” Chau
suggested.

 

Nearly nine in ten of Indian small
businesses expect to grow in 2021. Indian small businesses demonstrated
their willingness to innovate and pursue overseas markets. Fifty-three per cent
of respondents said they will introduce new products, services or processes in
2021. Forty-five per cent expect business revenue from overseas sales to grow
strongly; both results are the highest among the surveyed markets.

 

Increased adoption of technology brings higher
risks from cyberattacks. Sixty-eight per cent of Indian small businesses expect
to be cyberattacked in 2021, up 29 percentage points from in 2020, and
significantly above the survey average of 39 per cent.

 

CPA Australia recommends that Indian small
businesses consider the following actions to improve their performance this
year:

• Seek advice from a trusted adviser such
  as an accountant to improve cashflow.
• Enhance cybersecurity
  protections and review IT systems regularly.
• Continue to invest in technologies and
  innovation.
• Explore
  opportunities to improve customer satisfaction.
• Manage uncertainties from overseas
  markets and diversify risks in businesses.

Download  CPA
Australia Asia-Pacific Small Business Survey 2020-21