80% MSMEs opt for .com domain names as online destination: IAMAI & IMRB

According to a report titled ‘Tapping the MSME Potential’, published by the Internet and Mobile Association of India (IAMAI) and IMRB International, the MSME sector in India is rapidly embracing online media to scale-up marketing efforts. The report finds that 61% of 10 million technology-ready MSMEs, give high importance to adoption of various online identities such as email, websites, social media etc. Over 80% of these MSMEs would prefer .com domain names as their online destination. Micro, Small as well as Medium Sized Businesses find online media relevant for their business. This is true   especially for MSMEs that engage in Travel/ Trade and Logistics, IT/ITES, BFSI and Education businesses.

Table1: MSME Universe by Industry Vertical

MSME UNIVERSE

Vertical

Universe Size

Manufacturing

16%

BFSI

10%

Travel/Trade/Transport/Courier

19%

Education

7%

IT/ITES

8%

Retail

20%

Real Estate

4%

Health care            

4%

Other Business

12%

Total

10 Million

 

Source: IAMAI-IMRB

The report further finds that amongst various online tools, micro and small enterprises rank websites highest in relevance. There are about 1.35 mn small and micro enterprises that own websites and that number is likely to grow 3 times its size to about 4 mn by 2020. The key step towards creating a branded online presence is to register a domain name and the report describes the awareness and preference levels of various domains available in India. Clearly, .com domain not only has the highest top of mind recall (81%), but also, is the most preferred top-level domain (82%) for small, medium and micro enterprises in the country. The main reason for this is that .com domain names are universally used, trustworthy and easy to remember.

The report also highlights the adoption of social media, particularly amongst Micro (<10 employees) and medium sized (11-100 employees) organizations. However, as organization size increases (101 – 500 employee, 13%), there seems to be lower relevance attached to social media. This is probably because as an organization scales up, it becomes important to have a single branded destination such as a website to get discovered, which is integrated with various social media channels, which are useful for engagement.

The report elaborates on both current and future adoption rates across industry verticals for websites and online media. Retail vertical ranks lowest in adoption of online media. Of the 9 verticals, Retail, which comprises 20% of the MSME universe has only 4% adoption of website, whereas IT/ITES vertical which comprises 8% of the MSME universe tops the adoption of website with 36%.

 

Table 2: Current adoption of website by industry verticals

MSMEs from retail and healthcare verticals, which show lower adoption of website in their business, cite several reasons like lack of tech savvy amongst their customers, their perception of relevance of websites only for larger organizations, the myth that their business does not need a website and lack of adoption by their peers.  The table below provides interesting insight for non-adoption.

Table 3: Top reasons for non-adoption of websites

700,000 branded emails and this number is likely to grow by around 20% in a year’s time to 830,000 users. While IT/ITES, Education and Travel / Trade and Logistics lead the pack of corporate email id adopters, adoption in near future will be driven by Manufacturing, Healthcare and Retail verticals.

Manufacturing, BFSI and Retail are amongst the key verticals that will witness a faster adoption of websites by MSMEs in the near future. Website adoption rates in these verticals are lower as compared to other verticals. MSMEs engaged in IT/ITES, will see a relatively lower rate of adoption of website because there is high adoption there already.

Table 4: Future adoption of websites by MSMEs

The research finds that most MSMEs feel that having an online presence can help in enhancing the professional image of their organization in front of their client. Hence, the next time new business cards are printed, they are likely to have a .com domain name!

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