The sheer number of SMEs in India has made them an attractive community for startups to target for business, with many companies increasingly focusing their attention on them and working to rope them in through incentives and value-added services.

Online marketplace ShopClues, which hosts half a million merchants, of which 80% are small sellers, has launched several value-added services in the past six months to bring more small businesses on board. It recently announced that its financial assistance initiative, Capital Wings, has the potential to disburse. Rs 5,000 crore worth of loans from partner banks and NBFCs to its merchant base. The company also partnered with GoDaddy in May to create micro-sites for its merchants to help give them an online identity.

“Such services not only help in getting merchants on board but also in creating stickiness,” said Ganesh Balakrishnan, AVP for merchant services at ShopClues, adding that the platform mainly focusses on small Not So Small Of ShopClues merchants are small sellers

merchants so as to tap the size of the community to get a wide range of products. “We have seen an organic growth in our merchant base after bringing in such services,” he said.

R Narayan, CEO of Power2SME, said the power of SMEs lies in their numbers, and the startup has been working on aggregating their demands for getting bulk procurement of raw materials and in ease of getting loans. The company recently launched an online marketplace for SMEs to shop for consumer goods such as electrical tools and other items. “We launched SMEShops three months ago, and it has already seen sales close to Rs 1 crore. SMEs constitute a large ecosystem, and aggregating their demands helps in creating a big customer base,” said Narayan.

Last month, ClearTax introduced a feature to target the small business community to use its platform by contracting a 28-pages long form that businesses need to fill to file their tax returns. CEO Archit Gupta said he wanted the number of small businesses using the platform to grow from 20,000 at present to 1 lakh by March 2017.

Startups such as Instamojo focus almost entirely on small and micro businesses run by individuals. The digital link-based payments and ecom- merce platform currently caters to over 125,000 SMEs on its platform and plans to bring in more than one million small businesses by March 2017.

An advantage of getting small businesses on board is that the company can leverage their strong networks to bring in more businesses, according to Instamojo’s Sampad Swain. “We have 1.25 lakh small businesses on our platform, and 95% have come through referrals and word of mouth. Small businesses and entrepreneurs are usually well connected within themselves in a particular area or town, and if some of them like a service, they encourage others to come on board as well,” he said.

Another attracting factor is the SMEs’ large need for the digital stack, according to Anjan Choudhary, CEO of Inquirly Technologies, a startup that offers a range of customer-related digital services. Choudhary said 60% of its customers are SMEs and that the number is likely to grow.

“There is still a gap among SMEs when it comes to knowledge about digital marketing, with many small businesses still relying on the traditional channel of distributing flyers or putting up banners,” he said.

Source: Economic Times