More Kiwis Move Online For Business

Media release: Tuesday 5 April

More Kiwis Move Online For Business

• Internet marketing now first choice for SME advertising
• The majority of businesses bank online
• Half of rural businesses buy online

The use of the Internet is permeating every aspect of New Zealand business - from where farmers buy supplies to how retailers reach customers - according to a comprehensive survey of Kiwi businesses' online behaviour.

The MYOB Business Monitor Internet survey of more than 1000 local businesses of all sizes across the country, examines the wide-ranging ways New Zealand businesses now use the Internet to do everything from paying bills to making phone calls.

MYOB general manager Julian Smith says the survey highlighted the significant role the Internet plays in many aspects of business, while emphasising a number of areas where Kiwi businesses have more opportunity to engage in the online economy.

"Kiwi businesses' use of the Internet is surprisingly mixed," says Julian Smith. "While only 30% of businesses have a website, 77% use Internet banking and 25% use Skype or VOIP to make free phone calls - a relatively new technology.

"So while the convenience of key services is really driving businesses online, many are still not taking the opportunity to market their own products and services through the Internet - despite the fact that 50% of Kiwi businesses believe they would sell more and get more work if they used the Internet more effectively for marketing."

According to the Monitor report, manufacturing and wholesale businesses are leading the way online in New Zealand, with 49% having a business website, followed by retail and hospitality businesses, and the finance and insurance industry on 39%. Least connected is the primary sector (agriculture, forestry and fishing), of which only 11% have business websites.

However, despite few of them operating their own websites, rural businesses have embraced the convenience of the Internet to overcome the barriers of distance, with 50% buying goods and services online, compared to only 38% of city/metro businesses, and 38% using the Internet to pay their bills (32%, city/metro).

"Where the Internet has clearly transformed business in New Zealand, though, is where they choose to advertise," says Julian Smith.

"While traditional media like industry magazines, letterbox drops, direct mail and, in particular, newspapers are still part of the marketing mix, its clear that the Internet is now the dominant choice for local businesses looking to promote their goods and services, with 66% believing it is a critical marketing channel."

A quarter of business (25%) advertise online, while 20% choose newspaper advertising and 19% promote their business through Internet search engines like Google. At the other end of the spectrum, just 3% of local businesses advertise on television (the same number as use door-to-door sales) and 4% use outdoor.

There are some areas, however, where the Internet may not yet be living up to the hype, according the Julian Smith.

Only 18% of those surveyed business belong to online networks such as LinkedIn, while only 14% use social media like Twitter, Facebook, MySpace or YouTube to promote their business. Similarly, just 12% of all business owners write online newsletters or blogs to promote their business to existing and prospective customers.

The survey also highlights a significant generational difference in Kiwi's approach to the Internet, with 22% of Kiwi business owners aged 18-39 using social media, compared with just 11% for those aged 40 years and older.

Mr Smith says he expects this trend will change over time as more business owners, particularly those who are older and those who are less technologically savvy, build trust and see the value in social media marketing. "However, for the time being, those businesses are missing out on a potential marketing goldmine".

While the survey illustrates that Kiwi business owners have a long way to go before they reach the full potential offered by internet marketing, Julian Smith believes it is encouraging that more than one-third (35%) of all business owners surveyed search the web for information and updates on their own industry, while one third use the Internet to monitor competitive activity.

"New Zealanders are finding new ways to work, new ways to sell their products and services, and many valuable sources of critical information online," says Julian Smith.

"MYOB is working with New Zealand businesses to provide a wide range of options to make doing business better online - and this survey shows there is a real opportunity for Kiwi businesses to become more engaged in the global online economy, while making productivity gains.

"Particularly as the global economy continues to improve - it makes sense to maximise any opportunity to reach local and international clients."

ENDS

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