This study is a comprehensive view of the Indian SMB landscape, focusing on key aspects like - a) current technology adoption b) transition from traditional SMB to 'Digital SMB' c) the opportunity owing to SMB digitalization d) ecosystem initiatives d) the way forward To get your hands on the full version of the report, drop us a note at info@zinnov.com.

2. 2
KEY HIGHLIGHTS
Note: SMBs are businesses with FTE count of 1 to 999 further divided into 3 segments (Micro : 1-9; Small : 10-99; Medium : 100-999)
Source: Zinnov Analysis
~75 Mn
SMB Base in India
600+
Aggregators are enabling the rise of Digital SMBs
70%
Are Digitally-Influenced SMBs
$30 Bn
Digital opportunity offered by SMBs (2019)
105 Mn
Forecasted SMB base in 2024
ACCELERATING SMB BASE
DIGITALLY-INFLUENCED SMBs
AGGREGATOR-ENABLED
PRODUCTIVITY-LED DIGITAL SPEND
THRIVING SMB BASE

3. 2019
3
GDP (Constant Prices in $Bn)
Employment (in Mn)
Exports (in $Bn)
Key Metrics -
Indian economy & SMB contribution
Contribution by SMBs
2015 2019 2024
Indian Government’s Vision
(Contribution from SMBs)2958
520
535
1183
277
180
SMBs FORM A KEY PILLAR OF THE INDIAN ECONOMY
35%
40%
50%
30%
35%
45%
40%
50%
75%
Overall Count
Contribution from SMBs
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: World Bank, News Articles, Zinnov Analysis
Note: 1. In SMB contribution to GDP/Employment/Exports, agriculture vertical is excluded

4. Automotive Drug & Pharma Textile
Electronics Pharmacy Grocery
WITH ‘DIGITALIZATION’ BEING THE CORNERSTONE OF INDIA’S SMB ECOSYSTEM…
Vertical
Traditionalsegments
Emerging
segments1
SMBs
(# Mn)
Digitally-Influenced2
67%25
15
4
Key Sub-verticals witnessing Digitalization
3
3
2
2
<2
<2
<1
<1
4
3
2
2
2
<1
75Mn
Retail
Manufacturing
Logistics
Travel & Hospitality
Education
Real Estate
Professional Services
Healthcare
BFSI
IT/ITeS
Others
Content Creators
Media & Entertainment
Housewife Resellers
Driver Partners
Delivery Partners
Freelancers
60%
71%
74%
67%
75%
60%
75%
67 Mn
100%
100%
100%
100%
75%
75%
100%
67%
Total SMB
base in India
(FY 2019*)
8 Mn
70%
DigitalInfluencedSMBs
70%
Travel (Cabs) Hotels F&B Outlets
Warehousing Transportation Packaging
Accountants Architects Lawyers
Coaching Centres Schools Colleges
Clinics Hospitals Diagnostic Labs
Brokers Developers .
ISVs Resellers App Developers
Trading Insurance Agents Mutual Fund Agents
Web Developers Photographers .Publishers Broadcasters -
Telecom Energy & Utilities -
Video content Social Blogs .
Apparels Eatables Jewellery
25%
Charitable Service-Oriented -
Cab Drivers Bike Drivers .
NGOs 3
F&B Delivery eCommerce Hyperlocal
33%
Web developers App developers Consulting
4
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: MSME, News Articles, Zinnov Analysis
Note: 1: Emerging Segment is the new family of SMBs which are using online products/solutions to earn their living. This category primarily consists of a single business owner ; 2: Digitally Influenced: SMB having access to digital infrastructure (PC/Smartphone and Internet).
It may be listed on an aggregator portal (like Justdial) or have a website presence or listed on a social platform or communicating through WhatsApp/email; * (FY 2019 refers to the financial year ending on 31st March 2019)

5. THE MODELS OF SMBs’ DIGITAL DISCOVERY ARE DRAMATICALLY CHANGING
5
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: News Articles, Zinnov Analysis
Traditional Model
Social media-led
Discoverability
Transaction-oriented
Digital Presence
Hybrid Model
Wave 1
Wave 2
Wave 3
Wave 4
Social Media-
influenced eCommerce
Social Media
eCommerce
Domain Name + SMB Website
3+ Mn
Indian SMB pages
on Facebook
400K+
registered Indian
Resellers
150K
registered Indian
Resellers
Over 2Mn
registered Indian Resellers
on Meesho
~5 Mn TLDs in India;
53% attached to a Website
SMBDigitalDiscoveryIntensity
New! SSL | Chatbots | SEO/ SEM
SMBs at Wave 2, 3, 4 opting for websites:
• Better customer experience
• Save commission charged by Aggregators
• Go Global

6. 6
INDIAN SMBs ARE AT EVOLVING LEVELS OF DIGITAL INFLUENCE
Level L1
Level L2
Level L3
Level L4
UBIQUITY OF CONNECTIVITY
& COMMUNICATION
(Smartphone/PC/Internet/WhatsApp)
SPEED OF TRANSACTIONS
(UPI/IndiaStack/Payment
Wallets/PoS)
RISE IN DISCOVERABILITY
(Website/Online Listing/Social
Media)
TECHNOLOGY SOPHISTICATION
SMBs
Distribution
ENHANCED
PRODUCTIVITY
(ERP/CRM/Accounting)
48-52 M
18-21 M
16-18 M
8-10 M
<50K
Level L5
(RPA/IOT/Robotics)
Enabling the next billion users to go
online through Free Wi-Fi zones
Emergence of new businesses through
Digital Literacy
Digital Payments getting simplified by
messaging platforms like WhatsApp
Mobile-based Omnichannel platforms
enabling easy and cost-effective banking
Social media-influenced commerce
gaining traction
eCommerce platforms bridging the gap
between established sellers and SMBs
(~70% of Total SMBs)
75 Mn
Digital Influence
Trends Transforming SMBs
Tech Giants partnering to provide
affordable best in class solutions
Government offering subsidies & free
solutions to make SMBs future-ready
Source: News Articles, Zinnov Analysis; L5 is a subset of L4,L3,L2,L1
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
IOT in a box for Indian SMBs across
various verticals
Modern tech (RPA/Robotics) offering a
competitive edge to Indian SMBs

7. 7
SMB TO A ‘DIGITAL SMB’
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: News Articles, Zinnov Analysis
DISCOVERABILITY
INSIGHTS-ORIENTED BUSINESS
GLOBAL FOOTPRINT
INNOVATION
TRANSACTIONS
ACCESSIBILITY
LEARNING
SECURITY
MOBILITY
BLITZSCALING
D
I
G
I
T
A
L
S
M
B
CURRENT ADOPTION
Very High Very LowTECH ADOPTION
FUTURE ADOPTION

8. 8
Rising digital adoption offers a huge opportunity of ~$30 Bn in 2019
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: News Articles, Zinnov Analysis
Note: : Digital Opportunity : Total addressable market across various levels of tech adoption distributed by workloads like networking, productivity solutions, payment methods and customer engagement; Spend for Smartphones are excluded in the digital opportunity ;
E:Estimated, P: Predicted
Tapped Opportunity Across Levels (2019)
28-30% 18-20%3-5% 40-42% 3-5%
L1 L2 L3 L4 L5
% Share
(Tapped Opportunity)
Levels of Adoption UBIQUITY OF
CONNECTIVITY &
COMMUNICATION
RISE IN
DISCOVERABILITY
ENHANCED
PRODUCTIVITY
SPEED OF
TRANSACTIONS
TECHNOLOGY
SOPHISTICATION
Digital Opportunity
offered by SMBs
Tapped Opportunity
Total Opportunity
$ 14-16 Bn
$ 26-30 Bn
$ 80-85 Bn
2024 (P)2019 (E)
(53%)

9. 9
…WHICH IS FURTHER BEING UNLOCKED BY ‘CONNECTED VERTICALS’
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: News Articles, Zinnov Analysis
Note: Tapped Opportunity: The market size of digital adoption i.e, the current spending of SMBs in Digital Technologies; Untapped Opportunity: The potential addressable/targetable market for solution providers
L1 L2 L3 L4 L5
Legend High Medium Low
Verticals
Retail
Manufacturing
Education
Travel & Hospitality
Professional Services
Logistics
Healthcare
BFSI
Freelancers
IT/ITeS
Real Estate
M & E
NGOs
Others
Housewife Resellers
Content Creators
Driver Partners
Delivery Partners
6.2
4.8
3
1.4
2.8
1.7
1.1
1.1
0.6
0.8
0.8
0.6
0.6
0.3
0.6
0.8
0.6
0.3
Opportunity ($Bn) % Share in Digital Opportunity
FocusonTechInfluenceLevels

10. Tech ISVs Start-ups GovernmentAggregators NGOs/NPOs
ECOSYSTEM IS PLAYING A KEY ROLE IN SMBs’ TRANSITION TO A ‘DIGITAL SMB’
• Innovative
Pricing models
to accelerate
tech adoption
• Frictionless
access to capital
using digital
platforms and
algorithms
• Bringing digital
IPs for the SMB
ecosystem
• Secure and
fast banking
through Digital
Platforms
2 3 4 5
• Accelerate
Digital
Transformation
of traditional
SMBs
1
• Access to
Mobile-first
and Cloud-first
tech solutions
• One-stop
destination for
SMBs
• Initiatives to
make
technology
affordable for
Indian SMBs
• Access to newer
markets through
online channels
• SMB-first
solutions that are
secure and
enterprise-grade
• Improve
Discoverability
and enable go
global
• Rapid adoption of
Digital payment
platforms
• Access to
capital with
lesser
paperwork
• Drive Growth of
Emerging SMB
Categories such
as Housewife
Resellers, Driver
Partners, etc.
Large Enterprises
• Skilling SMBs
to help develop
entrepreneurial
mindset
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: News Articles, Zinnov Analysis
6
• Accelerating
hypergrowth
through Training
and Mentoring
• Enabling
entrepreneurship
and creating
employment
opportunities
• Bridging gaps
between SMBs
and investors
10

11. 11
Way Forward…
SMB Landscape Current Tech Adoption SMB to ‘Digital SMB’ Digital Opportunity Ecosystem Initiatives Way Forward
Source: News Articles, Zinnov Analysis
Digital Adoption
$80 Bn Digital Opportunity
(in 2024)
90% Digital influenced SMBs in 2024
Growing Digital Awareness
50% increase in Digital opportunity per SMB, rising
from $ 400 in 2019 to $ 800 by 2024
>10% contribution by Technology Sophistication
level (L5) by 2024 ; ~5% in 2019
40% of the SMBs will be Digitally discoverable through
Websites, Online listings or Social Media
Emerging Segments
25 Mn by 2024 ; CAGR of 30% from 2019 to 2024
Dominance of New age technologies
~70% of the emerging segment will include Online
resellers (Housewife/ Part-timers) & influencers
Snapshot of ‘DIGITAL SMBs’ in 2024
Ecosystem Initiatives
~60% subsidy on cloud by the Indian government to
boost tech adoption among SMBs
25% mandatory procurement from MSMEs by public
sector enterprises helping in SMBs business expansion

12. 12
Growing Digital Awareness
To get your hands on the full report, drop us a note at info@zinnov.com