Why Have So Few SMEs Embraced Ecommerce?

Only 20% of small- and mid-sized firms let customers to buy their products and services online. That's a problem in the digital age

Written by Deborah Aarts

In this age of digital living, consumers expect to be able to purchase whatever they want online. If they’re patronizing smaller companies, however, they’re likely to be disappointed.

In MasterCard’s recently released MerchantScope study—which surveyed more than 1,000 small- to mid-sized businesses in Canada, Brazil, Germany and South Africa—researchers found that while 90% of these companies have an online presence of some sort (though not necessarily a website), only one in five offer ecommerce capabilities. (According to a 2013 study by Google and Ipsos, 55% of small businesses don’t even have a website.)

Read: Most Small Businesses Still Don’t Have a Website

Theodore Iacobuzio, vice-president of global insights for MasterCard, explains the lag. “Advances in ecommerce—including payments—have often presented an opportunity for small businesses to level the playing field,” he says. “But, as consumers take advantage of emerging technologies like mobile to access deals and rewards, businesses of all sizes find themselves needing to create an €˜always on’ omnichannel presence or mobile app to attract new and repeat customers. Many small businesses, in particular, find this to be challenging.”

Yet it’s not difficult to set up a web presence; you can build a basic website in under a half an hour. And platforms like Shopify allow businesses to set up ecommerce capabilities in a few clicks of a mouse. So why are so many small businesses leery of ecommerce?

‘I’ve just been too busy,’ says one entrepreneur without an online presence. ‘I haven’t come up with a plan with what I want to do.’

It may be a simple matter of procrastination; the “I’ll get to that soon” syndrome. Bill Peatman, who has run a corporate communications consultancy out of Napa, Calif. for the past year, cites lack of time for his lack of a web presence. While he’s bought a domain name and intends to hire someone to build a site, he just hasn’t got to it yet. “I’ve just been too busy,” he told the Associated Press. “I haven’t come up with a plan with what I want to do.”

Read: Meet Today’s Web-Savvy Consumer

Or it may be that they’re just not that interested in getting new customers. Steve Love, who has owned Indiana-based handmade sausage and meat company LoveLand Farms since 1988, told the Associated Press that a website would bring in new business he’s not equipped to handle. “I don’t want it to grow,” Love said. “I’m already maxed out. I’m scared it would blow up on me.”

According to the MasterCard study, small businesses are avoiding implementing technology such as ecommerce for two main reasons: cost (cited by 46% of survey respondents) and lack of know-how (cited by 31%). And according to Iacobuzio, these perceived barriers are preventing them from “unlocking their true potential.” He elaborates: “This is important, not only for merchants, but also for the technology providers, banks and governments who support them.”

With files from the Associated Press.

Is your business set up to accommodate ecommerce? If not, what is preventing you from embracing the technology? Share your thoughts by commenting below.

Read: The No. 1 Way to Get Paying Customers to Your Website

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