Use of the Internet and E-commerce In Business

Business Use of the Internet and E-commerce

In July 2003, Telstra released its Yellow Pages Business Index: E-business Report (the E-business Report) on the online experiences of Australian small and medium enterprises (SMEs). The report examines the attitudes of SMEs towards e-commerce and their experience with it. While the report does not distinguish between B2C and B2B e-commerce, it does provide valuable information on the extent to which Australian SMEs have adopted e-commerce.

The E-business Report found that the proportion of small businesses with a website increased over the 12 months to July 2003 from 34 per cent to 36 per cent. Website penetration rates for medium-sized businesses were significantly higher and grew more strongly over the same period, from 71 per cent in 2002 to 82 per cent in 2003.

In contrast, almost all large businesses had a website and access to the Internet in 2002. Data from the ABS suggest that larger businesses access the Internet in a greater variety of ways than do smaller businesses. While 46 per cent of large businesses using the Internet had access via a dial-up modem in 2001-02, other methods of access included ISDN and other high-speed technologies. In contrast, 88 per cent of small businesses with Internet access used dial-up modems, with other forms of access being far less common.

The E-business Report indicated that the proportion of SMEs that used the Internet to sell products and services has increased. 33 per cent of all SMEs took orders online in 2003, as compared with 30 per cent in 2002. The proportion of SMEs that received payment for sales over the Internet grew more quickly, increasing from 26 per cent (in 2002) to 32 per cent (in 2003) for small businesses and from 50 per cent to 63 per cent for medium sized businesses.

The strongest area of growth in Internet use by SMEs has been accessing and using online catalogues (undertaken by 53 per cent of SMEs in 2003, as compared with 46 per cent in 2002) and receiving payments for products and services (a rise from 27 per cent to 34 per cent). The largest groups of customers that SMEs sold to online were those based in the same city or town as the SME.

Finally, the E-business Report indicated that security, including the ability of others to compromise security systems, was the primary concern cited by SMEs when queried about the barriers to engaging in e-commerce. Another common reason for not adopting e-commerce was a judgment that the technology was not suited to the nature of the business.

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