Adoption of digital means for sales helped a majority of small businesses survive the pandemic, a survey conducted by rating agency Crisil said on Thursday.
The agency polled 566 companies with a turnover of less than Rs 25 crore, 60 per cent of them engaged in manufacturing, last month to arrive at the findings.
The country was under a complete lockdown for close to two months and is yet to be fully opened with some restrictions still in place. Courtesy the restrictions on movement, a lot of shopping shifted to online means.
"Around 60 per cent of the respondents that transitioned to selling via digital platforms said it helped them survive, while the remaining said it provided growth," the agency said.
About 29 per cent of the MSEs (micro and small enterprises) surveyed were using digital sales channels, such as online aggregators/market places, social media, and mobile marketing, before the pandemic struck.
This shot up to 53 per cent among small enterprises and 47 per cent among micro enterprises as of November, it said.
Despite their limitations, micro enterprises are not very far from small enterprises in digital adoption, Crisil Director Bhushan Parekh said, adding that many of them are saying that they will be taking the route soon.
Among manufacturing sector, gems and jewellery and textiles showed the most improvement it said.
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, with micro enterprises showing the biggest jump (41 per cent, up from earlier 13 percent).
Textiles MSEs also showed a massive jump of 38 percentage points in adoption of digital channels compared with 20 per cent before the pandemic, it said.
In the services sector, realtors and human resources firms showed maximum adoption of digital sales channels, the survey said.
"Realtors were impacted by the pandemic largely due to the unavailability of migrant labour and travel restrictions. Eventually, these players adapted to the new normal by adopting digital sales channels and partnered with online aggregators to help them with lead generation," the agency's associate director Manasi Kulkarni said.
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