Local SMEs use Internet to do business: Survey
Local SMEs use Internet to do business: Survey
Tantri Yuliandini, The Jakarta Post, Jakarta
Small and medium companies in Indonesia are increasingly logging
on to the Internet to communicate with buyers, a study by Castle
Asia in conjunction with The Asia Foundation and USAID disclosed.
Castle Asia' researcher Bettina Cavenagh said that
surprisingly, out of the 227 small and medium companies she
researched across 12 cities in Indonesia, some 67 percent of the
companies were using the Internet.
"Considering that the availability of the Internet in
Indonesia is mainly in large cities, and that Internet connection
is still very slow, this number constitutes quite a large amount
of users," she said on Thursday in a seminar on the Internet and
small business development in Indonesia.
Bettina said that most of the companies had only started to
use the Internet in the last three years, but that about 20
percent had joined in the last year only.
The research also showed that those companies that use the
Internet in their businesses mainly have buyers located abroad or
that they have seen competitors use the Internet to an advantage,
Bettina said, citing businesses in Lombok going on the Net
because they see their counterpart in Bali doing well using it.
Some 93 percent of companies are using a dial-up connection as
opposed to wireless, cable or leased line, because of limited
availability or the alternatives are too expensive.
Some 147 companies, or 96 percent of the sample, use the
Internet to access email, with 90 percent using it specifically
to communicate with buyers.
Bettina said that the Internet as a communications tool was
considered very important especially for export oriented
manufacturing companies and overseas oriented domestic and trade
companies.
"Export oriented manufacturing companies usually meet clients
at trade shows and use email to communicate further with them. It
is considered a more effective way to communicate rather than by
fax," she said, adding that conversely their counterparts with
domestic orientation preferred faxed documentation.
However, of the companies using the Internet in their
businesses only 58 companies or 38 percent have their own
websites.
Many consider a website a powerful marketing and promotional
tool for a business, although they do not think it is important
for sales, Bettina said.
"Many businesses also reason that by having their own website
they gain credibility," she said.
However, companies do not maintain and update the information
regularly, and do not realize the importance of keeping up-to-
date information on their business on a website, Bettina said.
The survey also showed that besides communications, the
Internet is also used for research; to find potential buyers,
locate products and service suppliers, to do research on
competitors and undertake price and product comparisons.
"However, research is limited due to the slowness of the
connection," Bettina said.