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What are SMEs using the internet for?

The penetration of technology and e-commerce is increasingly pronounced in small and medium enterprises (SMEs), according to a Sensis Business Index survey.

Ownership of desktops, notebooks and tablets was 83%, 52% and 43% respectively in SMEs, according to the survey.

However, there are significant differences between small and medium firms, with the penetration of each type more pronounced in medium businesses, says Sensis.

Internet connectivity recorded was 84% overall and is 98% in medium businesses compared with 83% in small businesses.

In firms employing more than two people, internet connectivity is well over 90%. With very small businesses, those with 1-2 employees, internet connectivity is at 73%, the survey shows.

The most important reason for use of the internet continues to be email, as stated by 93% of all internet-connected SMEs.

Other key uses include banking, looking for information about products and services, and seeking suppliers of products and services. This reflects the importance of the internet for B2B transactions, says Sensis.

Employee size is clearly correlated with website incidence, the survey shows. It rises from 42% in firms with 1-2 employees in solid increments up to 100% in those with 100 to 200 employees.

More than half (61%) of SMEs with websites say this has improved the effectiveness of their business, mainly by increasing its exposure and facilitating information access for customers.

Expenditure on building and maintaining their website averaged $2,500 in 2014, which was similar to the year before.

The annual average was more than three times higher in medium businesses ($7,500) than small businesses ($2,200). Expected average expenditure on websites for 2015 is $2,400 according to Sensis.

An increasing amount of SMEs (31%) are using social media in their business, with nearly all of those surveyed using Facebook. However, the uptake of other social media platforms is not pronounced.

Furthermore, 60% of SMEs have made purchases online. For such SMEs, an average of 44% of their total procurement was transacted online, up from 41% the previous year.

The overall percentage of SMEs taking orders online was 43%. More specifically, 34% of businesses with 1-2 employees take orders online, and 50% of larger firms are utilising technology in this way.

Online sales, as a share of total sales activities, continues to increase. In 2013, this figure totalled 32%, in 2014 this increased to 37%, and now online sales accounts for 41% of overall sales.

More SMEs are also advertising online (35%), and 31% do so on social networks.

Of those surveyed, 28% use unpaid search engine optimisation (SEO) and almost one quarter (23%) of SMEs feel it is very important to be on page one of a Google search.