Manufacturing and retail embrace Internet benefits
Thursday, 01 May 2014
The manufacturing and wholesale industry and the retail and hospitality sectors have emerged as clear leaders in online adoption, as more New Zealand businesses begin to embrace the benefits of the Internet.
In the latest MYOB Business Monitor Digital Nation Report, 41% of all local SMEs now operate a business website – up from 34% in March 2013. A further 7% operate a social media site as an online presence for their business, while 16% have both a website and a social media site.
MYOB CEO Tim Reed says it's exciting to see more New Zealand businesses recognise the benefits of the Internet.
“More New Zealand businesses are beginning to embrace the opportunities the internet is offering – from access to international markets to increased engagement with their customers,” says Reed. “It’s particularly encouraging to see key sectors like manufacturing and retail leading the way. These are businesses where the access to international markets and greater depth of customer interaction that the Internet provides can make a real difference to the local economy.”
Of the main centres, Auckland has the highest level of online participation at 51%, with Wellington and Christchurch both on 48%. Across the rest of New Zealand, only 45% of businesses are online.
The survey highlighted the significant difference in online participation across industry sectors:
Sector Online presence (website and/or social site)
Manufacturing & Wholesale 80%
Retail & Hospitality 67%
Finance & Insurance 59%
Business, Professional & Property 45%
Transport, Postal & Warehousing 37%
Construction & Trades 33%
Those SME operators with a website report significant benefits in terms of new business, improved branding and customer engagement:
1. Generating more customer leads and enquiries (55%)
2. Enabling the business to have a more professional brand image (53%)
3. Made it easier for customers to do business (51%)
Interaction with customers (54%) and generating more leads and enquiries (37%) are also an important part of establishing a social media presence. Social media also enables businesses to have increased appeal to younger customers, according to 39% of SME operators.
Growing use of the cloud
In the latest Business Monitor, almost a third of businesses (32%) report that they are using cloud products and services at least some of the time.
Use of Internet technology is strongest in Wellington, with 44% using the cloud, followed by Christchurch (37%) and Auckland (34%). Cloud usage drops significantly outside the main centres, to 24% of SME operators. The finance and insurance industry (56%) and business and professional services (39%) are the highest cloud users, while the primary industries (10%) and construction and trades (225) report the lowest use.
Cloud use is also likely to be more widespread, based on the range of services businesses use regularly:
1. Email - 86%
2. Online banking - 82%
3. Filesharing/Voice over Internet (VoIP) equal at 25% each
5. Buying products and services online - 24%
Internet access also an issue
Satisfaction with Internet access outweighs dissatisfaction amongst SME operators, with 41% reporting they are happy with their current level of internet access, while 34% are dissatisfied.
In Christchurch, however, where businesses have become increasingly reliant on Internet access due to the disruption of the rebuild, dissatisfaction with current access is stronger (44%).
Although the Ultra Fast Broadband (UFB) rollout is targeted at improving Internet access it looks unlikely to have an immediate impact. Just 14% of local SMEs report they are currently connected to UFB, although 63% of SME operators who do not currently have access to UFB believe it would have a positive impact on their business.
“Building a robust high-speed national broadband network is an important aspect of providing the right infrastructure to support online business,” says Reed.
“However, we also need to ensure businesses are not overburdened by cost, and can both understand and access all the direct benefits to ensure the country can becoming a highly connected, 21st Century Digital Nation.”