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COVID stress boosts digital selling among micro, small enterprises: CRISIL

Niti Kiran     December 24, 2020

Adoption of digital sales channels among micro and small enterprises (MSEs) has increased significantly since the pandemic struck, reveals a CRISIL survey of firms with revenue less than Rs 25 crore. About 29 per cent of the MSEs surveyed used digital sales channels - online aggregators or market places, social media, and mobile marketing - before the pandemic struck. This number has shot up to 53 per cent among small enterprises and 47 per cent among micro enterprises as of November.

The survey, conducted in November, was aimed at gauging changes in the level of usage of digital channels - including of online aggregators, social media platforms and owned websites - by such entities after the pandemic.

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About 60 per cent of the respondents who adopted digital selling said it helped them weather the pandemic-induced stress, while the rest said it boosted sales. These respondents were also more positive about their near-term business situation compared with those that didn't take the digital route, highlighted the study.

Among manufacturing sectors, gems and jewellery and textiles showed the biggest improvement. The proportion of gems and jewellery manufacturers - largely non-precious, stone-studded jewellery, imitation jewellery, and luxury fashion jewellery - embracing online selling platforms has more than quadrupled to 55 per cent in November from 13 per cent before the pandemic. Micro enterprises in the segment showed the biggest jump - 41 per cent, up from 13 per cent.

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Textiles MSEs, too, showed a massive jump of 38 percentage points during the month in adoption of digital channels compared with 20 per cent before the pandemic. The increase was higher for small enterprises (44 per cent, up from 13 per cent) than micro-ones (14 per cent, up from 7 per cent).

Adoption in pharmaceuticals (excluding medicine retailers) remained unchanged at 29 per cent because of relatively higher offline demand. Among manufacturers of unbranded food products - including agro-produce processing units such as rice, wheat, and flour millers, and manufacturers of unbranded packaged foods - digital revenues slipped a notch given the localised nature of demand.

In services, realtors and human resources firms showed maximum adoption of digital sales channels, the CRISIL study showed.

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