KOLKATA, India – Online advertising is still at a nascent stage within India SMBs. According to an AMI-Partners study, less than 6% of PC-owning India SMBs (companies with up to 999 employees) advertise online – indicating a significantly high growth potential. A majority of India SMBs use traditional media and AMI expects them to shift their advertising dollars to more targetable and measurable media over time. As a result, online advertising spending by India SMBs is anticipated to grow at a CAGR of 27%.
These findings were released by New York-based Access Markets International (AMI) Partners. The growth in India SMB online advertising expenditures will be fueled by two key factors. First, India SMBs have positive growth expectations regarding e-commerce revenues. “Presently, a typical SMB engaged in e-commerce derives over 4% of its annual revenues via online sales and expects online sales to grow by an additional 6% over the coming 12 months”, says Swati Sasmal, Senior Manager – Research at AMI-Partners – India. Moreover, approximately a third of India SMBs are planning to prioritize the adding or improving of e-commerce capabilities next year. This growth will be supported by matching investments in online advertising.
Secondly, a huge number of these SMBs are yet to adopt online media – only a marginal proportion of India SMBs currently advertise online. As India SMBs become more aware of the effectiveness, measurability and predictability of using online advertising to reach the target audience there is likely to be a large influx of first-time buyers being influenced by this medium. A huge opportunity exists for India SMBs to reach their desired financial goals by optimizing their web presence and capabilities – this still remains a somewhat unexploited market.
Since the majority of India SMBs, especially the small businesses, generate a large proportion of their revenue from the local market, they still rely on traditional media like telephone directories and newspapers to reach their customer base. “However, electronic media can grow their revenues from this space significantly by actively reaching out to India SMBs,” says Sasmal. “India SMBs can then leverage this unique opportunity to showcase their products beyond any geography.”
Related Studies
AMI-Partners 2009 Emerging Asia-Pacific (India); SMBs Transition to Online Marketing – Internet Access, Web Hosting, E-Commerce and Online Marketing addresses the Internet from the view of service providers, online advertising/search providers, and e-commerce/webhosting providers. It begins with higher-level market opportunity, then moves to changes and impacts to the market, and then provides data and analysis pertaining to Internet access, website usage, and usage of online marketing media. Based on AMI-Partners’ annual surveys of SMBs in India, the studies track 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.
Challenging economic times typically produce a flight to quality. This truism also applies to the Emerging Asia-Pacific SMB market in India. As the economic crisis wears on, SMBs are becoming increasingly concerned with retaining current customers and finding new customers in more targeted and cost-effective manner. This report addresses how India SMBs are using the Internet in the current environment to aide in these activities.
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 businesses (SMBs), 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. 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.
