IAMAI study estimates accelerated growth for B2B Digital Solutions biz

18 Jan,2019

By A Correspondent

 

According to a report titled ‘B2B Digital Services Landscape in India-Impact on MSMEs’, by the Internet and Mobile Association of India [IAMAI] and IndiaMart, Indian B2B Digital services market, which is currently pegged at USD 5.6 billion is being driven by the rise of internet penetration in the country and growth of startups focused on servicing the B2B segment. In 2017 the share of B2B in the overall startup base was ~40 per cent. The report finds that India is a strong growth market for B2B digital solutions and is envisioned to be a USD ~29 billion market by 2023 growing at a CAGR of 39 per cent.

 

The report was launched at the India Digital Summit by Dinesh Agarwal, Founder of IndiaMart. According to the report, MSMEs contribute ~38 per cent to the GDP in FY18 and are rising beneficiaries of the growth of the digital services. The report further finds that the current estimated revenue of Digital Services that can be attributed to MSMEs is 25per cent. Digital services are gaining 1.4 to 1.6 USD billion revenue from MSME’s, and this is primarily on account of significant segment of client base that they form for marketplaces and listing platforms.

 

The estimated impact of digital services on MSME will grow from USD ~ 18 billion in FY18 to USD ~68 billion by FY23 growing at a CAGR of ~30per cent, the report notes.

 

Adds a communique on the report: “Going forward, other digital services that are expected to see increasing participation of MSMEs are fintech and SaaS. Fintech, led by digital payments and lending is transforming the way MSMEs transact; enabling digital credit assessment, easy loan application process and collection and settlement dashboarding. Lending and payments have already created a market base of ~1 million MSMEs. The segment is growing at a significant rate of 60per cent to 70per cent and would form a USD 9.5 billion+ market. SaaS is also a rising digital service that has begun penetrating into MSME sector and has created a base of ~0.3 million enterprises. It has enabled easy to adopt, cloud-based implementation of ERP and CRM for enterprises on pay per use basis. Hence, they have been successful in breaking the adoption barrier by bringing down the implementation costs. Currently, SaaS is a USD 0.9 Billion market but is growing at a strong rate of ~26per cent year on year.”

 

The report however points out that increasing adoption of digital services among the MSMEs will require them to circumvent the challenges of talent, mindset and digital awareness. Digital service players have an opportunity to create solutions that are easy to comprehend and use thus making the need for talent redundant. Government initiatives in partnership with private players to encourage digitization of MSMEs are bound to grow awareness and create a mindset shift.

 

 

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