From January 31, 2023, financial and business management software for small businesses, QuickBooks, will no longer be available in India
The exit comes at a time when a large number of SMEs are adopting digitisation, and it presents an opportunity for Indian companies like Zoho and Tally
QuickBooks’ exit also highlights the unique challenges posed by the Indian SMEs for service providers
After a journey of a decade, software company Intuit will stop offering QuickBooks, its financial and business management software for small businesses, in India from January 31, 2023.
The company has also stopped accepting new subscriptions in India for QuickBooks Online, QuickBooks Online Accountant, QuickBooks mobile app, and QuickBooks Time.
QuickBooks’ suite of offerings includes cloud accounting, invoicing, inventory management and cash flow management. It also offers an online practice management solution for chartered accountants through QuickBooks Online Accountant. For a seamless experience, QuickBooks had also launched a GST-ready version of its online accounting product in 2017.
The shutdown of QuickBooks in India will not impact Intuit’s 1,300 Indian employees, as per reports.
QuickBooks will convert all existing paid subscribers into free users prior to July 31, 2022 to enable them to continue using QuickBooks until January 31, 2023 without any charges. Customers who have an annual subscription will receive a refund for the unused portion of their subscription.
“We understand that the withdrawal of the product may create challenges for your business. We are committed to making the transition out of the product as straightforward as possible,” Intuit said.
Exit Provides Opportunity To Indian Companies
Surprisingly, the exit comes at a time when Indian small and medium enterprises (SMEs) are digitising their processes more than ever as a result of the pandemic. From digital bookkeeping to payments and several other needs such as inventory, and delivery, SMEs are increasing their investment in technology, and many of them are collaborating with SaaS startups to increase their efficiency.
In 2021, Indian enterprise tech startups raised more than $3.2 Bn in investments across 229 deals, as compared to $1.6 Bn in 2020 across 130 deals, as per an Inc42 report.
Further, Indian SaaS companies are poised to reach $30 Bn in revenue, capturing 8% to 9% share of the global SaaS market, by 2025, according to a Bain and Company report.
The exit of QuickBooks will help its competitors, such as SaaS unicorn Zoho, and Tally, to increase their market share. Unlike many other unicorns, Zoho is already running a profitable business, posting a total profit after tax of INR 1,917 Cr in FY21. It has more than 60 Mn customers and over 9K employees globally.
Considerably, Zoho has already started taking small steps to fill the gap caused due to QuickBooks’ exit. In a statement shared on Thursday, Zoho said it is open to serving customers of QuickBooks India. The Chennai-based unicorn also emphasised that it is hyperfocused on strengthening its operation in India.
“At Zoho, we understand how challenging it can be for businesses to find a replacement for their existing financial system. Zoho Books will be glad to serve the needs of those businesses looking for an alternative solution, and help them transition smoothly,” said Prashant Ganti, head of products tax, accounting and payroll, Zoho.
On the other hand, business management software provider Tally Solutions has dominated the accounting software market despite challenges from international players like QuickBooks. To expand its reach, Tally built a strong network, reached out to accountants, and focused on educating its users. It would also eye a larger share of the pie after the exit of QuickBooks from the Indian market.
Indian SMEs Pose Unique Challenges
While international companies like Intuit serve customers globally, Indian SMEs pose a unique set of challenges for these companies.
According to Satish N, chief product officer of SaaS fintech startup Zaggle, the SME segment is very complex in itself. An SME business can be a local shop on the corner or it can be a manufacturer, or supplier to big brands, they can all fall under the SME category, he said.
“Standardising a product or service for this segment is not straightforward,” he noted. According to him, SMEs can’t afford to go wrong in the choice of solutions for them as they have very limited access to capital, unlike enterprises.
For any SME-focused player, it is important to have a precise knowledge of the requirements, and understanding of challenges to offer suitable solutions in a short window. More importantly, as a number of SaaS startups are entering the Indian ecosystem to cater to SMEs, the wallet share of big players are also reducing, Satish added.
Speaking about the challenges while building for Indian SMEs, Dukaan founder and CEO Sumit Shah, during Inc42’s The Makers Summit 2021, had said that one of the key focus areas for SaaS platforms should be speed.
Meanwhile, speaking on QuickBooks exit, Abhishek Rungta, CEO of Indus Net Technologies, said on Twitter that India is a cost-conscious mass market. Therefore, a player can make substantial revenues in the services sector only if it has a huge customer base with all paying a small amount.
“The cost of software maintenance and upgrade in the Indian context is crazy. So if you have low customer base and low ARPU and you have to incorporate changes due to changes in regulation and taxation, you end up spending a lot of money,” he added.
The emphasis on cost is not new for players who are building for Indian SMEs.
At The Makers Summit 2021, Manish Patel, founder and MD of Mswipe, had said that India’s bottom and middle-end of the pyramid are all about cost-efficiency.
“Cost is an important component of the strategy – everything from what we are going to use, how effectively can we deliver upgrades to our customers and the overall cost of ownership of our service for our customers,” Patel said.
The unique needs and cost consciousness of Indian SMEs make it a difficult task to build for this segment. The challenge is bigger for international companies who might not always have enough understanding about their customers.