Over 40% of SBs (small businesses, or companies with up to 99 employees)
in India have indicated plans to invest in computers for the first time
in the next 12 months, opening up a huge opportunity for hardware,
software and solution vendors. The universe in India for small
businesses that do not own any computers (also termed as non-PC SBs) is
vast – around 2.6 million. On being queried,
over 40% of them – totaling more than a
million – revealed plans for first-time PC
adoption in the next 12 months. These findings emerged from a recently
concluded study by Access Markets International (AMI) Partners, Inc.
“The India SMB sector is en route to becoming
an extremely potent force within the Indian economy; yet it may seem
surprising to many that a huge majority of this segment (roughly 65%)
still manage without owning a single computer,”
says Dev Chakravarty, Senior Analyst at AMI-Partners. “If
we delve into the cause of the relatively lower usage of PCs, a
single-most striking barrier looms large –
the lack of awareness and education about the utility of computers.
After all, a commercial unit is not likely to invest on computers if it
feels that they have ‘no relevance to their
line-of-business’; this sentiment exists for
over half of the entities that AMI surveyed.”
Hence, a need remains to educate SBs about the myriad benefits and
applications of PCs.
The demographic analysis of SBs without PCs reveals that a huge
majority; above 90% of them are quite small and fall within the 1-9
employee category. The vertical breakout indicates a skew towards the
wholesale/ retail sector that makes up 55% of the universe. The non-PC
SB segment is also growing quite fast and displaying a healthy economic
trend. More than one third of them mentioned hiring plans in the next 12
months and over three quarters experienced revenue growth last year.
“Non-PC SBs are gradually realizing that
computerization and automation is the first step towards managing rapid
business growth – this probably explains a
shift towards PC-purchase plans. Pressure from ecosystem players like
customers and suppliers as well as an urge to outshine competitors are
some other key drivers behind PC purchases in the next 12 months,”
indicated Mr. Chakravarty.
The adoption plans of these first-time PC buyers add up to a likely
planned shipment of 1.6 million PCs in the next 12 months. Even if a
small fraction of these purchase plans is translated into actual
practice, this is going to boost the overall PC installed base and PC
penetration within the nation to a significant extent. Thus the future
holds considerable promise for hardware and software vendors.
When asked about their channel preference for future PC purchase, 57% of
non-PC SBs preferred the local retail store. Retail offers many
advantages, e.g. convenient options of buying over the counter and
scanning through the available brands and models –
thus providing a chance to weigh the pros and cons of each.
“However, an interesting trend is also the
rising popularity of local resellers/ system builders/ box-pushers (also
known as value-added resellers, or VARs) as a preferred channel –
mainly due to their personalized service & support. Non-PC SBs need
considerable hand holding in the initial stages, in terms of
installation and occasional troubleshooting. And herein lies the utility
of VARs,” mentioned Mr. Chakravarty.
Related Studies
AMI’s 2007
India Small Business Overview and Comprehensive Market Opportunity
Assessment study highlights these and other major trends in the
context of current/planned IT, Internet and communications usage and
spending. Products and services covered include established and emerging
hardware, software, applications and business process solutions. Based
on AMI’s annual surveys of SMBs in India, the
study tracks a broad spectrum of issues pertaining to budgets, purchase
behaviors, decision influencers, channel preferences, outsourcing,
service and support. Also covered are detailed firmographics and
critically important technology attitudes and strategic planning
priorities. This data points to key opportunities and messaging hot
buttons for vendors and service providers seeking to match their
offerings to SMB market requirements.
For more information about this study, AMI-Partners, or our global SMB
research, call 212-944-5100, e-mail ask_ami@ami-partners.com,
or visit the AMI Web site at www.ami-partners.com.
About Access Markets International
(AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and
business services strategy, venture capital, and actionable market
intelligence—with a strong focus on global
small and medium business (SMB) enterprises and extending into large
enterprises and home-based businesses. The AMI-Partners mission is to
empower clients for success with the highest quality data, business
strategy perspectives and “go-to-market”
solutions. Led by Andy Bose, the firm has built a world-class management
team with deep experience cutting across IT, telecommunications and
business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more
than 150 leading IT, Internet, telecommunications and business services
companies over the last ten years. The firm is well known for its IT and
Internet adoption-based segmentation of the SMB markets, its annual
retainership services based on global SMB tracking surveys in more than
25 countries, and its proprietary database of SMBs and SMB channel
partners in the Americas, Europe and Asia-Pacific. The firm invests
significantly in collecting survey-based information from several
thousand SMBs annually, and is considered the premier source for global
SMB trends and analysis.
|