Australian Biz Loving or Leaving Internet

A national survey conducted in Australia by Dun & Bradstreet found a slump in e-business activity, growing distrust in B2B transactions and fewer companies down under connecting to the Internet.

The survey also found that an increasing number of Australian executives said the Internet has had no positive impact on their business and do not believe it is important to their operations.

“Businesses have either committed to making the Internet work for their business, or have simply pulled the plug on it,” said Christine Christian, CEO of Dun & Bradstreet Australia & New Zealand.

The survey of 400 executives on Internet usage was conducted by D&B in January 2002 as part of its monthly National Business Expectations Survey. The same questions were asked of 400 business executives in January 2001. Almost half of all executives questioned in 2002 said they did not use the Internet “at all” to conduct business transactions. This figure has risen 20 percent since January 2001.

“In January [2002], 49 percent – virtually half of all executives – said that none of their business transactions were conducted via the Internet,” Christian said. “This has risen from 29 percent in the space of 12 months. On the other hand, more than 12 percent of businesses are now conducting 20 percent or more of their business online, up from 8 percent a year ago.”

Many of the concerns expressed by Australian executives centered around the security and reliability of e-commerce. While the number of executives who perceive electronic B2B transactions as being “not at all” secure and reliable has risen from 14 to 26 percent, the number who see it as being “very secure and reliable” has also risen, from 22 to 29 percent.

“These increased percentages at both ends of the scale have been drawn from the middle ground,” Christian said. “Twelve months ago these executives were still unsure of what the online business world had to offer. Indeed, the percentage of executives who perceive e-business as being ‘reasonably secure and reliable’ has fallen 19 percent from 64 in 2001 to 45 this year. It would seem that in the past 12 months many businesses have reached a conclusion one way or another. The middle ground is shrinking, which is also the case when you look at Web site ownership.”

In January 2002, 50 percent of firms that had their own Web site called it “an integral part” of the way they do business. This was up from 43 percent from the 2001 survey. But more than one-third (34 percent) said a Web site was “not important” to their business and that they didn’t own one. This figure is up from 22 percent in January 2001. Only 16 percent plan to have a Web site in the near future, which is less than half of the 35 percent who were in this same position a year ago.

“There are those making the Internet an important part of their business activities and those who have rejected the concept outright,” Christian said. “Business experimentation with e-commerce in the last 12 months has revealed that while a small proportion are doing more online, a larger proportion are doing less. Adding to this, the proportion of executives who said the Internet has had no positive impact on their business has risen 13 percent from 22 to 35 percent. The number who said it has had a positive effect has also risen by four points from 25 to 29 percent.”

The survey also found that fewer Australian companies actually have access to the Internet. While 100 percent of companies surveyed in 2001 were connected to the Internet, that figure fell almost 10 percent in the past 12 months.

“This could well be due to belt tightening during what was undoubtedly one of the most challenging years in Australian business history. Our surveys over this time revealed that monthly taxation deadlines put an enormous strain on business cash flow. At the same time, businesses were aggressively cutting profit margins in order to maintain market share,” Christian said.

The number of executives who said email was their main Internet use fell by 38 points in 2002, but many executives surveyed in 2001 gave more than one response. The percentage of businesses using the Internet for purchasing goods and services remained largely unchanged at 15 percent. Both marketing and business research as uses for the Internet jumped to 21 percent in January 2002, rising from 15 and 16 percent respectively in 2001.