|
·
Indian SMEs (at 71%)
are more optimistic about local economy as compared to Japan (at 62%) and
China (at 54%)
·
In terms of
optimism about global economic growth, Indian SMEs are nearly two times (65%)
more positive when compared to Australia (at 37%)
·
Indian SMEs look
forward to increased revenues with expansion into new domestic market
segments a top priority; 76% expect revenue growth of at least 4% in 2017
·
Nearly half of
Indian SMEs surveyed forecast a profit of 8% per annum by 2020; whereas
global findings pegged at 26%
·
With recent
political changes in the country, 73% Indian SMEs feel optimistic about their
businesses’ prospects
·
Indian SMEs have existing working capital (at 88%) and bank loans (at
77%) as the most readily available source of funds
·
SMEs in India
identify innovative and cost-effective financing as the top potential
solution to encourage their businesses’ success
·
Over 75% prioritise
investing in new technology by 2020
|
Small and Medium-sized
Enterprises (SMEs) in
India are highly optimistic about domestic economic growth in the next 12
months and are confident about their business performance in 2017, according to
the inaugural American Express®
Global SME Pulse2 2017, a new survey commissioned
by American Express and carried out by Oxford Economics.
The American
Express®
Global
SME Pulse2 2017, carried
out among senior executives and decision-makers across 15 countries, with the
purpose of understanding the priorities and aspirations of the SME community, revealed
that Indian SMEs are overwhelmingly optimistic about the health of the world
economy. Companies surveyed form part of India’s mid-market organizations1 having revenues of up to $90mn,
including SMEs.
According to the survey, Indian
SMEs are more positive about the domestic economy over the next 12 months than
their Asian counterparts. Indian led with 71% followed by Japan at 62%, China
at 54%, and Singapore at 26%. Interestingly, the confidence of Asian countries
is substantially higher than the global average of 45%. In terms of global
economic outlook, SMEs in India have higher optimism at 65% than Asian
counterparts with Japan at 58%, China at 47% and Singapore at 20%.
Healthy
optimism about profitability
SMEs
in India are confident about their ability to deliver increased revenues and
profitability. According to the survey, 76%
of the Indian SMEs surveyed expect revenue growth of at least 4% in 2017.
In
terms of profitability, Indian SMEs are similarly upbeat with 45% forecasting a
profit of 8% per annum by 2020. This is in excess of the global findings which
show 27% of SMEs forecasting net profits of 8% over the same period.
While
SMEs in India are optimistic about the economy and their own business, they
cite domestic policies, uncertain laws and regulations as major concerns over
the next year.
Commenting
on the findings of the survey, Saru
Kaushal, Vice President and General Manager, Global Corporate Payments,
American Express India, said: “With a conducive policy framework and positive
regulatory steps taken by the Government, the SME sector has seen substantial
growth. This survey clearly highlights the optimism and confidence among SMEs;
and businesses are deftly navigating through challenges to thrive in India.”
She
further added saying, “With SMEs focusing on expansion and investing in latest
technologies, they need to manage their expenses effectively. Financial
discipline can help companies tackle slower business growth even in a slackened
economic environment. American Express here plays a crucial role by providing
tailored expense management solutions that are designed to help mid-market
organizations, including SMEs to drive purchase savings.”
Optimistic
about recent political changes for businesses’ prospects
SMEs in India see positive light among the
government’s recent initiatives and support to boost the sector. 69% of them
feel that barriers to entry are coming down and providing business
opportunities. As revealed through the survey, 73% of Indian SMEs responded
that recent political changes in the country make them optimistic about their
businesses’ prospects.
Aim
to smoothen business operations through funding options
Amongst various sources of funds, Indian SMEs expressed
that existing working capital (at 88%) and bank loans (at 77%) are the most
readily available; whereas the funds they actually put to use are bank loans
(at 62%) and existing working capital (at 49%). Over the next year, Indian SMEs
plan to source funds through public equity markets (at 50%) and bank loans (at
46%). In order to streamline their future business financing options, Indian
SMEs ranked flexible lending and repayment options (at 37%) as the most
important factor, and high interest rates (at 49%) as the biggest pain point
when applying for business finance.
Focus on expansion and sales growth to drive financial
performance
Indian
SMEs are focusing on growth and expansion strategies to improve their financial
performance. The survey revealed that 38% of Indian SMEs feel that expansion
into new domestic market segments will be a top priority for their business
over the next three years. They are also pushing for sales growth with over 35%
looking to grow their current market share.
Increasing exports
part of the growth push
Exporting
is a core pillar of many SMEs’ growth strategies globally and India is no
exception. Almost 32% of SMEs surveyed said they recognize expansion into new
international markets as a pathway to improved financial performance over the
next three years.
Indian
SMEs are confident they are ready for export growth, with a sizeable 68%
strongly believing their company has the right plans to increase export
sales. An overwhelming majority (73%)
agree it is easier to access new export markets than it was three years ago.
Also,
37% of Indian SMEs said they will be looking at increasing operational
efficiency as another key priority for driving financial performance.
Technological
investment is the most important priority area
According to the research, the majority
of Indian SMEs understand the growing importance of technology and want to make
investments in the same. 77% of Indian SMEs felt the importance of applying the
latest technology in their businesses over the next three years. Another 71%
said that they are developing and
implementing innovation to business models, products and services and ways of
working. About 62% said they are prioritizing on quickly responding to changing
business demands. Understanding the need of being on track with technological
advancements, 75% of Indian SMEs plan to use more scalable technology, like
cloud based solutions in the next three years.
Look beyond the short
term
As
part of the research, top executives in Indian SMEs were asked about the
long-term goals of the business. While profit margin growth (51%) and revenue
growth (44%) are identified as the number one and two objectives, well over a quarter
(29%) state that both sustaining the business for future generations and building
company reputation (28%) are important long-term goals.
Comparing insights from India
SMEs to other geographies
Asian
countries:
|
SMEs optimistic about growth of global
economy in 2017
|
Region
|
Positive
|
Negative
|
Neutral
|
|
India
|
65%
|
4%
|
30%
|
|
|
Japan
|
58%
|
10%
|
28%
|
|
|
China
|
47%
|
10%
|
43%
|
|
|
Australia
|
37%
|
21%
|
42%
|
|
|
Singapore
|
20%
|
45%
|
35%
|
|
|
SMEs
optimistic about local economy in 2017
|
India
|
71%
|
3%
|
26%
|
|
Japan
|
62%
|
10%
|
22%
|
|
|
China
|
54%
|
9%
|
37%
|
|
|
Australia
|
43%
|
13%
|
43%
|
|
|
Singapore
|
26%
|
43%
|
31%
|
Other countries:
|
SMEs optimistic about growth of global economy in 2017
|
Region
|
Positive
|
Negative
|
Neutral
|
|
United States
|
54%
|
12%
|
33%
|
|
|
United Kingdom
|
33%
|
19%
|
47%
|
|
|
Argentina
|
35%
|
16%
|
48%
|
|
|
Brazil
|
46%
|
22%
|
32%
|
|
|
Canada
|
38%
|
12%
|
49%
|
|
|
France
|
27%
|
24%
|
48%
|
|
|
Germany
|
33%
|
12%
|
55%
|
|
|
Italy
|
32%
|
19%
|
47%
|
|
|
Mexico
|
37%
|
19%
|
44%
|
|
|
Spain
|
35%
|
17%
|
47%
|
|
|
SMEs optimistic about local economy in 2017
|
United States
|
59%
|
11%
|
28%
|
|
United Kingdom
|
38%
|
20%
|
41%
|
|
|
Argentina
|
46%
|
14%
|
39%
|
|
|
Brazil
|
44%
|
30%
|
24%
|
|
|
Canada
|
42%
|
16%
|
40%
|
|
|
France
|
37%
|
21%
|
41%
|
|
|
Germany
|
39%
|
11%
|
50%
|
|
|
Italy
|
35%
|
19%
|
46%
|
|
|
Mexico
|
39%
|
24%
|
37%
|
|
|
Spain
|
42%
|
21%
|
36%
|
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