Chandni Nihalani, Director, PayPal India
In a post-pandemic world where uncertainty still prevails and technological innovations have continued to surge, business leaders in India must maneuver through the new trends that will keep them ahead of the competition and help expand their business beyond borders.
Taking the leap and going global can not only provide Indian small and medium-sized businesses (SMBs) with access to a wider pool of capital, including foreign investors, international banks, and alternative sources of financing, but will also diversify their risk exposure. This is done by spreading their operations across multiple markets, thereby reducing their dependence on any one market. SMBs are increasingly relying on digital tools to enable this growth, with 53% of SMBs in India having adopted digital sales platforms.1
Companies across various sectors are also capitalizing on digital payments to cater to global consumer trends and demand. Indian SMBs are also rapidly adopting digital payments over cash, with 72% payments done through the digital mode compared to 28% cash transactions.2 For example, EaseMyTrip, a leading online travel tech portal, is leveraging PayPal to provide seamless cross-border payment experiences in the post-pandemic tourism boom.3
With the global economy becoming increasingly interconnected, going global can future-proof Indian SMBs by enabling them to adapt to changing market conditions and gain exposure to a diverse consumer-base.
Growing preference for personalized experiences
When it comes to products and services, consumers around the world are gravitating towards personalized experiences. They expect brands to understand their unique requirements and preferences and provide experiences that are appropriate for them. In the travel industry, for example, this has given rise to destination management consultants such as Culture Holidays who curate customized travel experiences and manage end-to-end travel needs for their customers.
Consumers are also willing to pay extra for premium service customized for their needs. For example, a 2022 McKinsey study in the US found that despite inflation, consumers continued to open their wallets with consumer spending increasing by 18% in March 2022 compared to two years ago.4
The need to be a sustainable consumer
At a time when the planet is facing the worst phase of the climate crisis, sustainability has become a great factor for purchases today. Consumers are becoming increasingly mindful of their choices to reduce their wastage and inculcate environmentally friendly practices. For instance, in the retail fashion industry, as more consumers seek out sustainable fashion, they are becoming increasingly inclined towards purchasing pre-loved luxury items instead of fast fashion.
Consequently, companies that emphasize sustainability and exercise transparency with respect to their business practices are gaining popularity. A 2022 global survey found half of consumers said they were willing to pay a premium for a sustainable brand and product. Furthermore, 49% said they have paid more money for products that are branded as being sustainable or socially responsible.5
While balancing the tight rope of protecting the planet and preserving the bottom line, SMBs can develop a sustainable supply chain that ensures responsible sourcing of raw materials, ethical labor practices, and reduced carbon footprint. Obtaining green certifications, such as LEED, BREEAM, or Energy Star, helps demonstrate their commitment to sustainability with transparency. This can help to build trust with global customers who are looking for businesses that share the same sustainability values as them.
Understanding consumer spending
Price is at the top of the list of consumers’ motivations for switching brand loyalty. As a result of the looming recession this year, consumers will be more cost-conscious and therefore may look beyond their shores for better-priced products. Despite ongoing inflation, more US consumers are looking for value. A 2022 Invoca study found that 63% of consumers surveyed said they were willing to pay more for a product or service if it meant getting better customer service.6
Businesses today offer a variety of payment options to their customers, including credit cards, debit cards, e-wallets, buy now, pay later (BNPL) and bank transfers. This is proving to drive impact as customers are looking for benefits and rewards when transacting online, through promotional discounts, low-cost borrowing, and loyalty rewards. Making the preferred payment methods available to allow for less cart abandonment can play a surprising role in increasing brand loyalty.
The Government of India has envisioned doubling the Indian economy to USD 5 trillion by 2029.7 Considering the pace at which consumer trends and preferences continue to evolve, a solid and effective customer strategy will be crucial in exploring the vast export potential of Indian SMBs in achieving this goal and making their mark on the global map.