Over a third of small and medium-sized enterprises (SMEs) are in danger of appearing irrelevant to their customers without a website, with an ever-increasing number of people searching online for products and services.
The 37% of SMEs in South Africa with no Web presence are losing out on a significant channel of communication.
This is a key finding of the yearly SME Survey, which assesses the competitiveness of this sector of the economy. Principal researcher of the survey Arthur Goldstuck says other results from the survey have shown conclusively how having a website correlates with increased profitability.
Goldstuck indicates that some 79% of SMEs with a website report profitability, with 30% of these claiming to be strongly profitable. This is a significant difference, compared with those without a website, where only 59% report profitability and just 14% of these claim to be strongly profitable.
“The popular argument made by these businesses is that there are not enough people online to justify a Web presence. However, they fail to take into account the enormous uptake in smart phones. With more smart phones expected to be sold next year than any other type of phone, it could be fatal for an SME to adopt this viewpoint,” he says.
“In the digital age of smart phones, South Africa is witnessing the greatest acceleration of Internet use the country has ever experienced. This translates directly into more people going online to find services. I have no doubt that we are reaching the point where an SME’s website will become the glue that holds together all its other marketing efforts and activities,” he explains.
He points out that, when studying individual vertical markets, the great irony highlighted by the survey is that the financial services sector – supposedly a high-end area of business – has one of the lowest percentages of website use.
“Less than half, about 41% of all auditors, accountants and insurance brokers can be found online. This is particularly troubling given that the major banks all have a significant presence online and a vast array of Internet-based tools available for their customers. More and more people who are familiar with the banks’ websites will, when looking for an auditor or accountant, expect to find them online,” he adds.
Goldstuck suggests that many of these professionals are not yet online because 78% currently maintain a fairly high level of profitability. Therefore, they do not feel the need to stay with the times. However, he believes that, as the Internet becomes the single most important means of searching for a service provider, these SMEs will find themselves increasingly disadvantaged.
“In fact, the only sector with a lower per- centage, 36%, of websites is education. I think this is because many of these training institutions and specialist schools and colleges are targeting the mass market. Their failure to develop a website is an extreme example of the perception that not enough people in South Africa use the Web. These institutions clearly need to get online, and fast, as only 19% of respondents to the survey claimed to be profitable,” he says.
Goldstuck adds that he is not surprised to find that the information technology and telecoms sector has a massive 89% of companies online.