ABS: Latest statistics on businesses online
The latest ABS survey of business use of information technology reveals that many Australian businesses are still not online in, and those that aren’t are missing out.
Small business lagging with web presence
While 90.1 per cent of businesses had internet access in 2009/10, only 40 per cent had a web presence such as a website. Big business (200+ employees) is well represented online, with 94 per cent boasting a web presence, but micro businesses (less than 5 employees) lagged far behind at 29.2 per cent.
Looking at individual industries, the arts and recreation services industry led the way with 64.9 per cent having some web presence. The wholesale trade sector also has a strong online representation at 57.3 per cent, while we would expect IT sector to be relatively well engaged online (58.3 per cent). In contrast, just 10.9 per cent of agricultural businesses have an online presence.
While most businesses of all sizes used their web presence to provide information about their business and offer online contact facilities, interestingly it was the micro businesses that were outdoing small and medium businesses on website features. 17.4 per cent had online payment capabilities, 6.8 per cent had facilities to track orders and 6.6 per cent had personalised pages for repeat customers.
Businesses are making orders but not taking orders online
The rate of businesses making orders online is growing faster than the rate of businesses taking orders online. Between 2007/08 and 2009/10, the total share of businesses that have made orders over the internet has increased from 42.7 per cent to 46.5 per cent. But while nearly half of Australia’s businesses are willing to make orders, much fewer are actually giving others the option to order from them over the internet. Only 24.8 per cent of businesses received orders online, up marginally from 23.7 per cent two years ago. Looking specifically at retail, 33.8 per cent took orders over the internet in 2009/10.
Nearly two thirds of online orders come in the form of an email not linked to a website, which is most common amongst small businesses. However, the use of more sophisticated methods is increasing slowly. 16.8 per cent had an order form on their website while 13.6 per cent had an online shopping cart.
Income from online sales growing
Businesses who do receive orders online are seeing it account for a larger share of their total income. In 2007/08, 15.0 per cent of these businesses said more than half of their income came from online orders. Just two years later and that figure has risen to 21.9 per cent. And the biggest gains are occurring in smaller businesses. The share of micro businesses with at least half of their income coming from online transactions rose from 19.0 per cent to 23.3 per cent, while for businesses with 5-19 employees it was up from 10.3 per cent to 21.4 per cent.
Overall, Australia businesses earned $143 billion in income from orders received online during 2009/10. That is a massive increase on the $81 billion reported in 2007/08.
Most businesses have not experienced security problems
The survey reveals that 11.7 per cent of businesses connected to the internet have experienced some sort of internet security incident. The impacts of these breaches are most likely to involve service downtime (61.8 per cent) or corruption of hardware or software (53.0 per cent). Big businesses were more likely to experience security incidents (19.4 per cent), however micro businesses were more likely to experience loss of income as a result (15.3 per cent).
So what does this all mean?
This snapshot of the business use of IT shows that most businesses are either reluctant to get online or are not realising the potential benefits it can bring them. There has been only a relatively minor increase in the percentage of businesses that have an online presence or are taking orders online, yet the level of spending occurring over the internet is growing at record pace.
If you would like more information about how you can get ahead of the competition by getting your business online, check out the following links:
- How to establish an online presence
- Getting started with ecommerce
- Online shopping carts
- Choosing your payment methods
- Protecting your business’ data online
Is your business one of the 40 per cent with an online presence? Do you have any tips to share with other businesses about how to get online from your experiences?
By Natalie, DBCDE
Edit
Hi Natalie, Great information! I think one of the challenges many small business owners are facing is that they do not have the resources (e.g. a dependable e-Commerce team) needed to get online. I do see there is an increasing number of business owners are taking internet marketing training course. They first need to be educated so that they know what they want, then they can hire e-Commerce professionals to help them accomplish their goals.
Hi Home Business Mom,
Thanks for your comment. Yes I agree, learning about e-commerce either by doing your own research online or by participating in a training course can definitely be worthwhile, whether you then decide to hire an e-commerce professional or not. While it will vary area to area, some great places for small business owners to start include their local Business Enterprise Centre, local Council and local training providers.
Natalie,
Could you provide a source for the $143 billion figure? Thanks!
Hi John,
That figure, as with the others, is from the ABS Business Use of Information Technology 2009-10. You can directly access the information about the income businesses generate from online orders received at:
http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/E95DF5A76BAA29C8CA2578F6001C2EB3?opendocument
Hi Natalie,
From my experience with small business owners in our local community, it is just a matter of education and understanding the benefits of spending their valuable time getting an online presence.
Sometimes small businesses also lack the basic database and commercial information required to successfully start offering online ordering facilities. It can be a real challenge for them to describe and photograph their products, let alone weights required for shipping costs and inventory control.
The hurdle is often time.
Thanks Claire
There can certainly be challenges when successfully implementing online ordering facilities, and as you note it’s a matter of understanding how the benefits can be worth the expense. A good way to get started in e-commerce without going to much expense is to look at the stock a business has that just won’t shift. Offering it online through an appropriate marketplace such as http://www.eBay.com.au, http://www.etsy.com, or for local transactions where postage isn’t required, http://www.gumtree.com.au, may just help it sell. Alternatively, shops could choose to only list items above a certain value, or focus on one or two product lines that make that particular shop unique.
Hi Natalie,
Thanks – this is a good summary of the stats.
From my experience, the big questions that are seldom researched are “How many businesses are happy with their website including the way it works, the results it gets and the ROI the business gets from it?”
The answer is (imo) Not Many.
Most businesses do not use their websites very well at all. Despite having access to analytics, Most have no real idea about the results they get – which partly stems from no clear goals for the site, and partly from an inability to effectively measure how much the site helps in the customer’s ‘shopping’ process rather than just the ‘buying’ process.
What is the value in a business providing information – especially if the recipient of the information never makes contact with the business after accessing the info ? (Qualifying potential customers “in” and “out” of your sales pipeline is great – but it’s far better if you know you are doing it and can measure it…)
And then there is the ROI. Very few businesses measure this – or even really know how to measure it. So when it comes time to plan and invest in their next website, they make guesses that are often wrong – and buy the wrong thing from someone who may or may not know what they are talking about.
Hopefully the info on this site will be helpful. Thanks.
Cheers
Richard Keeves
Thanks for your comment, Richard. It’s definitely useful to consider Return on Investment and how analytics can be put to good use. If you have any comments on any content on this site please feel to drop us a line at digitalbusiness@dbcde.gov.au
Depending on your business of course, web presence sint as easy as slapping your business on a website/domain anymore. Everything from social to geolocational marketing comes into play. E.g google places.
Great information about income from online sales growing. Business is really growing nowadays. I hope this will benefit people out there especially when it provide job opportunities.
Hi Natalie,
Thanks for that very informative stats. However, Most small businesses that don’t have the manpower to design and update or pay a webmaster regularly, can advertise cheaply using reputable online business directory like http://australianbizdirectory.com.au/compare.php
they basically create a mini website on their directory listing out the essential features of your business like contact details, address, business logo and phone number. The bottom line is to drive traffic to your business. So with your little fee, they do all the hard yard. That will be another way for small to medium size business can be online and maximise profit.
Hi Natalie do you have any more recent information on businesses and websites. The info above is great but is now several years old and perhaps takeup has increased.
Thanks for the update
Stephen
Hi Stephen. The statistics listed here are the latest from the ABS, but there are other sources of data. eBay released some statistics based on a small survey of several hundred businesses earlier this year; you can find a summary in this blog post: our blog post on the eBay report.
The Boston Consulting Group has also released an international comparison based on a wide variety of data sources. You can find a copy of the report here:
If you’re interested in e-commerce, the Australian Communications and Media Authority also publishes data on consumer spending patterns. You can find our blog on their latest report into online shopping here: