Business Missing Opportunities Of The Internet

5 November 2010

New Zealand Business Missing Opportunities Of The Internet – Survey

• Only 34% of Kiwi businesses own a website, 20% use e-commerce • NZ retailers more online than Aussie counterparts • Australian business faster to adopt social media

With the number of internet users set to reach over two billion globally this year, few New Zealand businesses are taking full advantage of the online economy, with only 34% of Kiwi businesses owning a website and 20% selling products and services online, according to the latest MYOB Business Monitor.

The survey of over 1000 New Zealand businesses across all economic sectors, conducted by Colmar Brunton, showed that businesses in the manufacturing sector were the fastest adopters of the internet, with 50% owning a business website, followed by retail and hospitality businesses on 48%.

According to the survey, while the online adoption rates of the two countries are very similar – with 35% of businesses in Australia owning a website – New Zealand retailers are far outstripping their trans-Tasman counterparts, with only 36% of Australian retail businesses online.

MYOB general manager Julian Smith says the results of the survey highlight an opportunity for Kiwi businesses to become more engaged in the global online economy – and for the whole country to make productivity gains, particularly in comparison to Australia.

“We know businesses that have a website, and trade online, perform better – generating more revenue gains than businesses without a website,” says Julian Smith.

“When we look at ways we can boost the productivity of the whole economy – helping more businesses get online would achieve real results.”

According to the Monitor, 44% of businesses with a website have more sales or orders in the pipeline (booked in the next three months), compared to just 30% of businesses that don’t operate online. Looking at the last 12 months, 37% of businesses with a website reported an increase in revenue, while only 28% of businesses without a website saw revenues rise.

Mr Smith says throughout the country, rates of online adoption are very similar, with the main centres only slightly higher than the rest of New Zealand.

“Perhaps surprisingly for the highly-connected Auckland, though, it is Christchurch that leads the way on online activity, with 37% of all businesses operating a website, followed by Auckland on 36%,” says Julian Smith.

“Wellington – despite being the seat of Government – is lagging behind, with only 31% of businesses owning a website.”

However, according to the Monitor, there is considerable difference in online activity by size of business. Small and medium enterprises in New Zealand, with 5 – 19 employees, are most active online, with 68% owning a website, while only 28% of sole traders have an online presence.

More sophisticated online tools and trends are also yet to make significant inroads into business activity, with 14% of businesses using the rapid development of social media to support business aims. The survey, however, showed a marked generation gap in the use of social media, with 22% of business owners under 40 using social media tools to promote their business, compared to 11% of those in the over-40 age range.

Australian businesses are slightly more aware of the benefits of social media, with around 18% using social media for business purposes.

The survey also provided an insight into how Kiwi businesses used the internet, with: • 12% writing blogs or online newsletters to promote their business, • 14% using social media, • 22% advertising online, • 29% monitoring competitors online, • 35% conducting online research and monitoring industry trends.

Julian Smith says MYOB is focusing most of its NZ$90 million R&D investment fund on finding ways to get more businesses online and help them use the internet more productively.

“New Zealand’s internet economy is an issue of national significance – one that needs to be addressed not only by individual businesses, but by Government, agencies and business leaders,” says Julian Smith.

“As the furthest flung OECD nation, this is an opportunity we could embrace that could provide immediate productive benefits to New Zealand. And without doubt, aiming to become one of the world’s most connected economies would provide a very significant advantage to Kiwi businesses of all kinds.”

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