Dun & Bradstreet: Over 82% of Small Businesses had Negative Impact
According to our survey, over 82% of businesses have experienced a negative impact, and 70% believe it will take them nearly a year to recover demand levels prior to COVID-19. Around 60% of companies surveyed expect more measures and support, including government initiatives.
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, released a survey today on “Impact of COVID-19 on Small Businesses in India and the Way Ahead”. This survey covers responses from over 250 small businesses (50% each in manufacturing and services sectors) with annual revenue between INR 100 and INR 300 crores across 7 major cities in India. According to our survey, over 82% of businesses have experienced a negative impact, and 70% believe it will take them nearly a year to recover demand levels prior to COVID-19. Around 60% of companies surveyed expect more measures and support, including government initiatives. Further, the survey states that the three topmost challenges that might hinder small businesses to scale up their businesses are Market Access (42%), Improving Overall Productivity (37%) and having Access to More Finance (34%).
The granular firm-level data captured through the Dun & Bradstreet Commercial Disruption Tracker indicated that around 95% of firms were impacted in April 2020 when the national lockdown was imposed. Even with progressive unlocking, 70% of businesses remained disrupted till August 2020 and 40% till end of February 2021.
At Dun & Bradstreet, our interactions with Small Businesses over the last two decades indicated that access to markets and better credit facility has been the major challenges in scaling up their operations. During our recent survey, the Small Business owners have cited the three most important support measures that they need to revive their businesses post the pandemic are Better Credit Facility (59%), Better Marketing Support (48%) and Adoption of Technology (35%). Small businesses are the hardest hit across countries and sectors, and India is no exception. The pandemic has exacerbated some of these issues and made scaling up company activities even more difficult. Given the intensity and duration of the pandemic’s devastation, these threats are likely to persist in the near future as well. The rate of recovery of India’s commercial enterprises, and thereby the economy, will be determined by the strength of the recovery of small business” said Arun Singh, Global Chief Economist, Dun & Bradstreet.
Avinash Gupta, Managing Director, Dun & Bradstreet India said, “The pandemic has speed up the pace of digitization across sectors and businesses have reaped advantages like cost reduction and increased productivity. Globally, digital adoption has accelerated by 7 years due to the COVID-19 crisis. Our survey points out that 82% of surveyed Small Businesses have digitized their daily operations during this pandemic, which helped them in Reduction in Cost (54%) and Enhancing Competitiveness (51%). Adapting digitization is extremely critical to manage the havoc the pandemic has caused on supply chains and to solve various logistics and supply chain issues going forward”.
Key findings from the survey:
Challenges That Small Businesses Will Face And Support Measures They Need To Revive:
- The three top challenges that might impede them to scale up their businesses: Market Access (42%), improving the Overall Productivity (37%) and Having Access to More Finance (34%)
- Three most important support measures that are needed to revive their businesses: Better Credit Facility (59%), Better Marketing Support (48%) and Adoption of Technology (35%)
Better Credit Score:
- Emphasis on Credit Score is the key challenge for accessing credit as stated by 35% of the respondents and collateral requirements cited by 32%
- Around 50% of the respondents believe that a credit score by a 3rd party on their creditworthiness and capabilities will benefit them
Market Intelligence And Market Entry Support
- More than 40% of surveyed Small Businesses use some type of market intelligence sales tools. Also, more than 50% of Small Businesses who do not use any market intelligence sales tools, have plans to use it in the future
- More than 40% amongst Small Businesses who use some type of market intelligence sales tools are cited to have taken help from 3rd party to connect with global prospects
Role Of Digitization – During And Post Pandemic
- 82% of surveyed Small Businesses digitized their daily operations during this pandemic
- Reduction in Cost (54%), Enhancing Competitiveness (51%) and Better Understanding of Customer Behaviour (45%) are the foremost benefits derived through digitization
- Leveraging on digitization, Small Businesses will be able to address their key traditional problems faced over the years i.e. More Focus on Customer Base (62%), Data security (43%), Evolution of Products and Services (40%)
Future Plans Of Small Businesses Regarding Adoption Of Next-Gen Technologies
- 66% of the respondents are planning to leverage Next Generation Technologies like Artificial Intelligence (AI), Machine Learning (ML) and Industrial Internet of Things (IoT) for their business operation
This report is based on a survey by Dun & Bradstreet covering responses from more than 250 SMEs (50% each in manufacturing and services sectors) with annual revenue between INR 100 and INR 300 crores across 7 metro cities in India. The cities included are Bangalore, Delhi, Hyderabad, Chennai, Mumbai, Kolkata, Ahmedabad. This information is supplemented by primary data from national and international sources, and secondary data from the International multilateral organisations, to allow our team to provide a unique perspective.