New Delhi [India], November 28 : The new and emerging Indian small and medium businesses (SMB) are increasingly prioritising online stores for their products. According to a new report by NielsenIQ (NIQ) 60 per cent of businesses say that online stores are their most critical sales platform.
The report added that medium-sized businesses are leading the shift to online sales, with 67 per cent saying that e-commerce is their primary channel, followed by small businesses at 51 per cent.
The transition underscores the growing reliance on digital platforms to reach wider audiences, especially among emerging brands.
While online channels dominate among SMBs, convenience stores are also witnessing growth in India, with 48 per cent penetration rate, compared to a much lower global average of 18 per cent.
Large companies are also leveraging this channel, with 58 per cent citing it as critical, followed by 54 per cent of medium-sized enterprises and 40 per cent of small businesses.
The "An Inside Look" survey report further adds that traditional trade remains highly relevant for consumers, while e-commerce is increasingly gaining prominence in metro areas, driven by its convenience and diverse product offerings.
Key drivers behind this growth are convenience, diverse product availability, and the growing popularity of categories like ready-to-eat products, salty snacks, biscuits, and packaged atta.
"According to NielsenIQ Market Measurement, emerging manufacturers are achieving 1.5x higher growth in e-commerce compared to category averages in noodles, refined oil, biscuits, coffee, and packaged atta. These varied channel preferences across business sizes signal a broader retail shift in India and underscore the critical role of omnichannel strategies," said Pallavi Suresh, Executive Director, Emerging Brands, NIQ India.
These segments have witnessed growth rates between 39 per cent and 52 per cent in the past year. The report also highlights the economic pressure faced by these businesses.
Inflation continues to challenge SMBs, prompting cost-management strategies such as replacing materials with cost-effective alternatives (50 per cent) and expanding distribution investments (49 per cent). These measures are helping businesses navigate through rising costs while maintaining profitability.
Other strategies include streamlining product portfolios by removing low-performing items (47 per cent) and ramping up marketing investments (47 per cent) to boost visibility in an increasingly competitive landscape.
On pricing strategies amid inflation, the report stated that companies are forced to adopt sophisticated pricing strategies. About 66 per cent of small businesses, 67 per cent of medium enterprises, and 75 per cent of large businesses are actively revising pricing strategies to tackle inflationary pressures.
Despite challenges, about 33 per cent of Indian SMBs prioritise revenue growth, 30 per cent aim to expand into new categories, and 25 per cent are exploring product line extensions.
Pricing strategies have become critical for businesses as 66 per cent of small businesses, 67 per cent of medium-sized enterprises, and 75 per cent of large businesses grapple with inflation.
Large companies are addressing these challenges by diversifying distribution channels, while smaller firms focus on cost management to safeguard their market position, added the report.