Are Australian Small Businesses Ready to Buy IT Products Online?

NORTH SYDNEY – AUGUST 5, 2002 – IDC examines if Australian small businesses are ready to buy IT products online and according to IDCs small business research the answer is, not quite yet.

 

As of a few months ago only a very small proportion of those small businesses surveyed had purchased IT products online. But these small businesses are already using the Web as a key element of their procurement process: a very significant number of the companies surveyed use the Internet to compare products and prices, and they make regular use of vendors' Web sites, said Kourosh Ghassemi, IDC Australias Senior Analyst, Small Business.

IDC believes that a growing number of small businesses prefer to use different channels for different purposes. The VAR channel is typically used by small businesses that require specialised services; office equipment, consumer retail and department stores are typically used by businesses that may be price shopping; and the direct response channel may be used by businesses that need immediate availability and want the convenience of purchasing either by phone or via the Web.

The use of multiple channels will likely continue in the future, with the direct response channel most likely to be used in conjunction with other channels of distribution.

Although the use of the Internet remains limited to information access and product comparison, all evidence gathered suggests that Australian small businesses will in the next few years shift part or a significant portion of their IT procurement, over the Internet.This process is already beginning to materialise and become more evident in the software market. The impact on the IT hardware is more complex, since it involves a higher physical and logistics component, commented Ghassemi.

The main inhibitor to not ordering online is the existence of an established relationship with a vendor or a reseller. This argument is two-sided: it may mean that companies prefer dealing with their suppliers in a traditional way but also that their current suppliers do not offer them the ability to order and purchase online as they would like to.

The other two main inhibitors to online purchasing by Australian small businesses are lack of product choice and lack of flexibility in product configuration. As for other aspects such as price issues they do not appear critical.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and eBusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts local and worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organisations, eBusiness companies and the financial community. Additional information can be found at www.idc.com.au