PayPal’s MSME Digital Readiness Survey
Impact of COVID-19
2
More than half of MSMEs positively impacted by COVID-19
Impact by COVID Areas impacted
Positive
100%
80%
Positively
impacted, 52%
33% 32% 31% 30% 29%
More delivery Better Increased Increased More online
60% options available transaction cross-border offerings / customers
options trade increased
demand
40% Not impacted, 12% Negative
20% Negatively
impacted, 36%
22% 20% 20%
Supply chain Logistics difficulties Decreased demand
0% issues
1 in 3 businesses benefited from better payment options and cross-border selling
A Digital Shift in
Consumer Behaviour
4
Online buying through various payment options on the rise
among consumers
Shift in online trade Ways to grow business
Changes in consumer pattern during COVID
behavior
More positive / Promoting / selling on 56%
receptive to different 79% social media
payment options
Accepting more payment
50%
Buying more online 65%
51% 46% methods
Increased Increased
ticket-size re-purchase Making my products
available online 46%
(spending)
from existing
customers
MSMEs Have Gone
Online to Survive &
Thrive
6
Social commerce picks up among Indian MSMEs; 2 in 3 use
social media as a sales channel
Adoption of online selling channels
Currently using Intend to use
Social media
66% 18%
Own eCommerce
website 62% 20%
Social media is the top online
Company-owned selling channel for India’s MSMEs,
platforms/Apps 61% 28%
but the intention to leverage
3rd party eCommerce
54% 29% own platforms like apps and 3rd
platforms
party eCommerce platforms are
Marketplaces 54% 22% the highest
MSMEs seek to invest in their own eCommerce channels
49%
Usage & plan for own
eCommerce channels1
100%
Using and no plan
80%
to further expand, of the surveyed
48% MSMEs keen on expanding or
developing own website or Barriers to adopting own
app eCommerce channels1
60%
40% Using and plan to
further expand, 30%
56%
20%
0%
Planning to start,
19%
Not using and no plan to do so, 3%
22%
Not currently using
reflected there is a
lack of technical
knowledge
1. Own eCommerce channels includes own social media, eCommerce websites and
company-owned platforms (e.g. app)
Cross-border trade
helps MSMEs scale
9
Almost 9 in 10 businesses have grown through cross-border
trade during the pandemic
Adoption of cross-border selling
100%
3 in 10 businesses realized the
global opportunity and began
80% cross-border trade during COVID
Started prior to
COVID, 64%
60%
86%
40%
20% Started during Reported an increment in CBT business
COVID, 35% during COVID with an average growth of
40%
0%
Not currently engaged but
intend to do so, 1%
9 in 10 MSMEs say cross-border trade is a key area for
business growth
Attitudes towards cross-border
trade
94%
Expanding / exploring
MSMEs say cross- cross-border trade is
border trade can a priority within the
help grow the next 12-months for
business MSMEs
Cost, exchange issues and managing fraud are barriers
to cross-border trade
Challenges to sell globally Preparation for cross-border trade
High costs
74% 48%
Partnership with third party online selling
platforms
48% Development of own global official website
Exchange related
issues 31% 48%
Internal digitalization as preparation for
online selling
46% Development of own global app
Worried about
fraud 30%
43% Adoption of global payment system
In order to sell cross-border, nearly half of the MSMEs surveyed are looking at building an omnichannel presence
by partnering with a third-party online platform and would consider implementing a global payment system to
help facilitate international sales
Building trust
through
payment platforms
13
MSMEs to offer newer payment options; increase
investments to build digital trust in their platform
95%
Digital/newer
98%
ways
of payment
70%
including
MSMEs plan to invest in more 89% 70% expressed interest in adopting
payment options Cards PayPal
The real cost of online fraud is often borne by MSMEs who sell cross borders due to majority of consumers
making payments through cards. Digital payment companies are verifying consumers and merchants through
their risk-management capabilities to reduce fraudulent transactions and decrease impact on MSMEs
MSMEs to focus on enabling more payment options and
a better check-out experience
Objectives to improve the checkout and payment option /
experience
Accepting payments from new digital 60%
sales channels
38% Expanding new, local payment methods
to sell outside India
57%
56%
Integrate loyalty schemes and
discounts with checkout procedure
are planning to invest in 55%
improving the checkout Use of digital wallets/ consolidating
and payment option / payment types to improve efficiency
53%
experience
Optimizing for mobile payments
51%
Fraud prevention
Half of the surveyed Indian MSMEs focus on technology
adoption for better customer experience
Top 3 objectives to invest
49% 61%
are planning to invest in 58% 57%
improving customer
experience
Improve customer Expand digital Expand Customer
loyalty touchpoints Base
16
Conclusion
17
Harnessing the right digital tools could spell success
for MSMEs
Get online Consider cross-border
Choose your
A seamless customer and
digital channels
check-out experience
Be social Managing fraud
Research Methodology
Fieldwork Sample
Fieldwork: 6th
Sample endorses a mix of
October – 3rd 250 Indian Micro, Small & industry, mainly comprising
November 2021 Medium Enterprises the Services (36%),
(MSMEs) with an annual Production (28%) and Retail
turnover of INR 5 to less & Hospitality (16%) sector
Online than 250 Crore
survey
Thank you
