More than half the small merchants surveyed by American Express for its 2021 report feel that the Government’s new MSME guidelines will yield better financial opportunities and open doors to better schemes. A substantial majority of the merchants surveyed across the country believe that the Government’s move to include retail and wholesale businesses in the MSME sector will enable them to engage with the formal financial sector leading to an industry-wide overhaul with better business prospects. As merchants look forward to more sectoral legitimacy by getting the MSME classification, they are also confident of their economic resilience in the wake of a potential third wave of the pandemic.
The report, which surveyed merchants across ten cities to explore the impact of the pandemic on the country’s small businesses, also states that these businesses have adopted innovative strategies to engage their customers and revive their trust and confidence to make purchases from local shops and small businesses (LSSBs). Over 50 percent of the merchants have accelerated the use of digital payment and 46 percent have adopted safety measures and maintain cleanliness inside the stores. Nearly half of the merchants surveyed highlighted that they have improved their direct communication with customers using SMS/ WhatsApp and social media.
Cashless payments, new delivery methods, increased efforts to advertise, and in-store safety measures and hygiene have become critical for consumer trust and business continuity. By adopting such measures, the report cites that 64 percent of the small merchants are confident that their businesses will survive amid speculations of Covid-19’s third wave.
Manoj Adlakha, SVP and CEO, American Express Banking Corp. India, said, “The resilience shown by small businesses during these times is admirable. They have constantly invested in new ways to improve their business model and communication with the customers. This fact is also recognized by 82% of surveyed customers who stated that local shops and small businesses (LSSBs) established new ways of interacting with them which were not available pre-pandemic. We are also delighted to see that the customers are open to support LSSBs as 7 in 10 are ready to prioritize shopping from them. To support this customer intent, we have launched our Shop Small campaign for the second year in a row and are confident that it will help them to Shop Small from their favorite outlets in a safe way.”
Anurag Gupta, Vice President & Head, Global Merchant Services, American Express India said, “It is heartening to see that more than 65 percent of the small business merchants we surveyed feel confident to take on future challenges posed by the pandemic. While small businesses have embraced new and innovative ways to build trust and confidence amongst their consumers – leveraging tools such as WhatsApp and social media; adopting in-store safety measures; as well as encouraging consumers for digital payment transactions – we are committed to supporting them throughout their business recovery and continuity”.
Key highlights of the survey report:
Communication with consumers and innovation key for developing stronger connect with their consumers:
Nearly half of the small business owners surveyed, stated that they have increased the level of communication to engage with their consumers and about a third identify increasing the digital presence of their business as the key for survival. While 63 percent of the merchants surveyed used SMS/ WhatsApp messages, 56 percent leveraged social media posts and 47 percent advertised directly on social media platforms. The survey also outlined that 63 percent of merchants focused on maintaining hygiene and safety for staff and customers and 46 percent encouraged customers to use non-cash payment transactions.
Small businesses continue to focus on key priorities to retain consumer trust and build business resilience:
While embracing digital payment and presence has been the survival mantra for most merchants, the survey revealed that 54 percent accepted new payment methods and 43 percent started new delivery methods, as primary steps for business continuity. Moreover, the key priorities that merchants want to focus on are maintaining safety measures and mental/ well-being for themselves and their staff.
Shopping small important for consumers:
87 percent customers agree that they have a big role to play to support the sellers and help them with business revival. Perhaps driven by this recognition, 57 percent say that they would be willing to shop from neighborhood stores instead of ordering online, and 54 percent stated that they would recommend small businesses to their friends.