Five top tips for SMEs to grow businesses in uncertain times

For a significant portion of last year, the rupee value was in a downward spiral and the economic uncertainty continued in the developed markets of the west. While the rupee depreciation may have brought short term gains for SMEs across certain sectors, the long term effect was detrimental among sectors that rely heavily on imports for raw materials. With weakening demand in the west and higher cost of materials, many SMEs saw a rising pressure on margins.
 
However, just as calm waters do not make a good sailor, Indian SMEs too can look back to glean some useful insights in how to sustain business growth in the face of difficult macro-economic circumstances.
 
Despite the rupee regaining some stability, the larger macro-economic climate is still cloudy. To weather the storm ahead, here are some suggestions for SMEs in India to better prepare themselves to take challenges head on.
 
1.Broaden market horizons
Even as demand from many mature, developed western markets has stagnated or even dropped in response to the growing economic uncertainty, Indian SMEs will need to set sights on newer shores. India is, today, recognised as a price and quality conscious manufacturing hub. Our fluency with English, the language of global business, also makes it easier for us to forge new trading partnerships. Increasingly, Indian suppliers have been seeing a higher interest from buyers across emerging markets including South East Asia, Middle East and South America.
 
For instance, we have witnessed our Alibaba.com members in the jewellery industry see an increased interest from buyers in Brazil, China, Argentina and Libya – these were markets that were virtually unknown to them a few years ago; while, the Middle East is emerging as one of the top buyers for spices and agro products. Similarly, the apparel sector has seen a rise in inquiries from markets such as Malaysia, Indonesia and Brazil.
 
2. Localise offerings and approach
As Indian SMEs look beyond traditional markets to uncover potentially untapped export destinations, it will become imperative for them to recognise local preferences in each of their new buyer markets. Indian SMEs looking to reinforce their competence in the global arena will have to get an essence of the culture, language, habits and preferences of the market. They will have to be astute in recognising emerging trends across key international markets and customise their product development, marketing and delivery strategy to leverage these trends.
 
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For instance, to cater to the increased demand for jewellery leading up to the Lunar New Year celebrations (which falls January 31 to February 3 this year), Aligarh-based Masterpiece Jewellery created a special range of pendants and neck-wear for customers in China, Taiwan and Korea.
 
3. Build and sustain trust
Though Indian SME suppliers have some distinct advantages over their counterparts in other markets – quality craftsmanship, a price advantage and low linguistic barriers – it is essential to build and maintain trust especially in global trade. If Indian SMEs hope to raise their profiles amongst the international buyer community and tap the growing demand for Indian products, then Indian SMEs will have to ensure promptness and transparency in business dealings.
 
Simple things such as having product pictures, complete product descriptions, accurate contact details listed on the company sites or e-commerce platforms go a long way in assuring buyers.  Responding to customer enquiries promptly and anticipating their needs are also key points for international business acumen.
 
4. Digital media analytics and Big Data
Netrepreneurs or entrepreneurs with a presence on the internet, inadvertently accumulate a lot of data – records of what buyers are searching for, where they are from, what they buy, when and how often, amongst other trends. This allows them to pick the right keywords, customise their marketing strategies and tailor-make a more personal experience for their buyers.
 
For instance, if an SME in the food processing industry with a presence on an e-commerce marketplace, who has seen an increase in searches for Jam from Spain, you can smartly add keywords like ‘mermelada’ which is more likely to catch the eye of Spanish buyers.
 
It will also be important to notify your customers about your privacy policies and ensuring their personal information is safe within your company’s hands.
 
5. Brick and click to omni-channel
Over the last few years, we have seen numerous businesses expand their presence online by adopting e-commerce platforms in addition to physical outlets and businesses. Last year, we saw another trend emerge – that of ‘Click to Brick’, where entrepreneurs launched full-fledged online businesses with little or no physical presence, before expanding to stores, warehouses or factories.
 
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However, the consideration for an entrepreneur or exporter or small business owner will no longer be restricted to click or brick. With the emergence of mobile, Indian SMEs will have to prepare themselves for an omni-channel approach, ensuring that their buyers have a uniform buying experience no matter which platform they choose or which part of the world they are based in. The online and offline experience for Indian buyers will continue to merge, and small businesses will need to be prepared.
 
Finally, whether it is e-commerce or social media marketing, big data analytics or omni-channel presence, openness to adopt and innovate with technology will hold the key to the development and growth for many Indian SMEs and entrepreneurs.
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The author heads Alibaba.com operations in India as the Country General Manager