When the virus threat snowballed into a full blown pandemic of grave proportions all across the globe, the writing was pretty much clear on the wall –; survival was going to be a long, treacherous road.While no one was particularly insulated from the effects that it could bring in its wake, it implied a definite existential crisis knocking loudly on the doorstep of smaller firms.In India, when the first lockdown had started in March 2020, small businesses struggled to make ends meet in an environment where “;work from home”; was alien to their very core and cash flows became acutely scarce. Even the economic stimulus package doled out by the government for MSMEs did little to soothe the woes of a sector which found itself in the eye of the storm or, in this case, the fury unleashed by the virus.But there is another side of this story as well. In the midst of all the chaos that ensued, a parallel narrative came to the fore. Ecommerce players, technology majors, social media giants, dating apps, digital payment firms and what have you –; the support for “;small”; saw a ramp up in its scale. Be it specialised programmes to uplift small sellers on ecommerce platforms, the rollout of food stickers by Instagram for small businesses in the food industry or even the push by brands to launch products in small towns – small became a big buzzword this year.So has Covid given an all new meaning to the “;small is beautiful”; adage? Mohammad Athar, Partner, PwC India calls it a change of mindset that is unravelling itself. “;If firms are great at their product, being small is no longer a problem, they don”;t need to be of a certain scale to serve key clients – technology has put those issues to rest,”; he highlights.Pump it upArchana Vohra, Director – Small and Medium Businesses at Facebook India, concurs that a lot of things have changed with the pandemic, including purchase behaviours. “;A lot of behaviours have started coming in, which triggered small businesses to go online. And since many of them are going online, there is a strong need to train them, skill them, to make sure they are going on a platform where they will get customers,”; she says. The social media giant has noticed increased traction of digitally led behaviours on its platforms during this time. For instance, it found that the Instagram Live views increased by more than 60% week-on-week and in many of the places, hardest hit by the virus, messaging volume increased more than 50%, and voice and video calling more than doubled across messenger and WhatsApp.Vohra says that there has been a scale up in their initiatives that were on in the pre-Covid era and this will continue in the times to come. “;Purchase, pre purchase, fulfillment and conversion cycles have changed. A lot of brands, which you could not think would be online, are now online. For example, a brand like Swasthya Ayurveda in Ahmedabad, which does Ayurvedic medicines has seen a huge growth on the platform as they are reaching out far more now,”; she rationalises. 77078362Ecommerce majors would perhaps readily agree to how this time meant an increase in seller sign ups witnessed during the period. Flipkart directs attention to a 125% increase in new sellers signing-up on the platform, in comparison to its existing seller base, for the April-June 2020 period. The ecommerce player mentions unique seller stories at this time which tried to turn the tide and reaped dividends.”;One of our sellers from Udaipur, Nilesh Dodega, catering to the mobile phone accessories category was able to see a 3x demand in his business, as the e-commerce restrictions eased and he returned to the platform. He had utilised the break to take stock of his business and plan the way forward, and was able to see a steady growth on the platform. Over 90% of our sellers have been able to resume their operations in today”;s scenario,”; claims Jagjeet Harode, Senior Director and Head -; Marketplace, Flipkart.Among some of the initiatives introduced by the company to help MSMEs restart businesses also included working capital. A special offer was run on loans through Flipkart”;s Growth Capital programme to enable independence for MSMEs who operate online.Light at the end of the tunnel?There have been endeavours by other players too to enable survival of such businesses. Earlier this month, Mastercard had announced Rs 250 crore to help reboot Indian SMEs. “;Small businesses are the foundation of India”;s economy, contributing nearly 35 percent of the GDP. As a result of these initiatives, India”;s small businesses and entrepreneurs will gain increased access to credit and build operational efficiencies through improved customer and inventory management, employee engagement and regulatory compliance,”; Porush Singh, Division President, South Asia, Mastercard had said in a release.Similarly tech major Microsoft introduced an SMB Covid-19 Resource Center as a collection of resources to help SMBs gear up for remote work and to weather the storm with mentoring from fellow business owners.Incidentally, a majority of the companies that ET Digital reached out to say that SMBs had always been a focus area for them even prior to the Covid time. However, the scale up in support, advertising, offerings and campaigns for them has seen a different level of momentum altogether now to make them survive and emerge stronger from the crisis.In a recent chat with ET Digital, Sheela Nambiar, Senior Director, Oracle Digital said SMBs are now relooking at their operational model and also looking at adopting digital tech promptly. She adds that the pandemic had increased the pace of firms looking at cloud offering and Oracle, over the last three months, has helped SMBs in setting up their remote office with a significant number using the lockdown to migrate to the cloud. “;Indian SMB segment is the biggest growth driver for Oracle,”; Nambiar said. 77077978Athar of PwC India breaks down this dynamic further by talking about the potential that can evidently be seen in small firms for the larger ecosystem. “;Small firms have the potential to enable profitable growth of large firms, and hence creating synergies with small firms is becoming central to large firms’ agenda. Scenarios like Covid have brought pressure on possibilities of top line growth, and hence, large firms are looking for bottom line growth – this is where small and niche firms can help,”; he avers.The business model, he feels, is going through a disruption phase where firms are following asset-light models to generate efficiency. “;We now have demand aggregator platforms where small firms are being onboarded by large firms to come and access the large market. Technology and global value chains are enabling access of better products across markets, and helping small firms grow faster, if they have unique and distinct capabilities,”; he adds.Besides small firms, the focus has also now moved to small towns that are being looked upon as bringing the next wave of resurgence. Lesser panic of the virus in smaller cities coupled with migrant labourers going back to their native places and more upbeat consumer sentiments has made the small town story stronger and perhaps given a golden opportunity to Tier II and III cities in this time. 77078038Then and nowIn the end, it is all about business and many established firms realise the opportunity to get millions of small firms to be associated with them. SMEs have always been the lucrative pot of gold, but one that proved uncannily difficult to reach. The pandemic has provided a significant opening. If one analyses the time of the financial recession of 2008, the impact on India back then had been largely limited. India”;s GDP had still seen a growth of 7.9% in the last quarter of 2009. This is nowhere near the abysmally low predictions forecasted for FY 21. India had bucked the trend at that time and was looked on by other developing nations and investors for its resilience in the face of the global downturn. However, the situation in 2020 has been starkly different with the economy undergoing a major turmoil since the Corona scare showed up.Small firms then hold out the promise in India as a beacon of light which can dispel the dark and gloomy spell brought about by the unwelcome virus. Industry experts call it a good churn that is taking place in the midst of all the upheaval. Covid-19, they reason, has brought in new variables that did not exist earlier.Well, the seemingly “;small economy”; is not so small anymore –; rather such businesses have a chance to show their capabilities in a better way and the bigger players, in turn, will have more skill and talent to choose from that can generate overall efficiencies in the value chain. Such mutually rewarding synergies between the two can perhaps be the best bet for the economy to counter the threat of the deadly pandemic.
Read more: economictimes.indiatimes.com