20 per cent of the MSMEs or 14 million will adopt digital services by 2023, growing at a CAGR of 35 per cent.
It has been reported that offering digital services to MSMEs is a market that has a potential to grow exponentially in the coming years.This market will grow at a CAGR of 50 per cent for the next five years to touch $10 billion from $1.5 billion last year.
It also indicated that greater adoption by more number of MSMEs and increased spending by them for digital services, including online sales, payments, lending, logistics, advertisements and SaaS are set to grow. RedSeer Consulting pointed that as of 2018 three million or just 6 per cent of the MSMEs had adopted digital services.
Sunny days ahead
Anil Kumar, founder and CEO of RedSeer said that small businesses find it difficult to get resources who know how to operate the various software and digital tools.Since businesses are small/less complex, they do not feel need to buy or use these digital services.
However,it expects that 20 per cent of the MSMEs or 14 million will adopt digital services by 2023, growing at a CAGR of 35 per cent. There annual spend will increase $500 to $650 in five years. Both together will take the total market size to $10 billion.
Online marketplaces have been instrumental in MSME digitization, by opening a wide customer base which never existed for MSMEs, supported with deep insights around the products, demand, planning and pricing. Starting from this initial hook for MSMEs, over time these platforms have themselves become more mature and are offering an ever-wider bouquet of services for their MSME partners.