Report: Increase in companies not going to web

A report by Technowledge Asia indicates a 22.6% increase in companies not interested in setting up a website

SINGAPORE - The recent downpour over dotcom hype has made some companies think twice about doing e-business, especially small companies with more to lose.

Small and Medium Enterprises (SMEs) in Singapore with websites are twice as likely to adopt e-commerce as those without websites, according to an annual tracking study of IT usage among businesses.

37% of SMEs surveyed in Singapore indicated no plans to set up a website in the near future, an increase of 22.6% since 1999.

The study was done by a Singapore-based Internet research and consultancy provider Technowledge Asia together with US-based international technology research and consulting company The Yankee Group.

Among companies with a website, the findings indicate that more than half were set up more than two years ago, with approximately 15% set up less than a year ago.

Overall, most companies preferred to use their websites as a communications tool and a channel to access company information, with providing better customer service following a close second.

Analyzing the data
The opposing trend is true in the United States where website adoption is increasing across the board among SMEs, according to The Yankee Group's most recent SME survey. Of the 72% of SMEs without a website, 29% planned to set one up within the next 12 months.

"Websites get companies on the e-commerce track more easily," said Ramesh Ramachandra, managing director for Techknowledge Asia. "Initially, corporate websites provide information on the firm's products and services. The next step would then be providing a complete cycle of online transactions - ordering online and facilitating online payment and delivery."

"We are witnessing an interesting trend in view of the e-commerce hype in Asia. The increasing reluctance of companies to jump upon the e-commerce track indicates that online transactions may not be an "end-all" solution for everyone. Companies need to establish what works for them, and ultimately how IT will be able to contribute to their revenue model."

Survey methodology
The study encompassed research into 400 companies in Singapore - mirroring the same number interviewed in a similar study last year.

A representative sample was chosen based on staff size and contribution to the country's GDP according to industry - Technowledge Asia claims that the sample was also chosen to represent the national landscape as closely as possible.

The SMEs tended to be represented in the manufacturing, import/export, transportation/communications, financing/insurance and services sectors.

A slight growth was also observed in the number of SMEs in the manufacturing and import/export sectors since 1999, with the majority being mid-range SMEs (with a staff between 50-100), said Poorani Thanusha, general manager for Technowledge Asia.

A brief summary:

• 37% of SMEs surveyed plan not to set up a site, an increase of 22.6% from last year.
• 50% of companies with websites had done theirs 2 years ago, 15% within the last year.
• Most companies use their sites as communication tools for users to find company information. Online services come second.
• There is a slight growth in SMEs dealing in the manufacturing and import/export sectors.

Details of this study and other reports at a promotional rate can be found on Technowledge Asia's promotional website at www.planningservice.net.

About Technowledge Asia
Established in January 1999, Singapore-based Technowledge Asia aims to provide businesses with in-depth, independent Internet market analysis from an Asian perspective. Technowledge Asia provides industry players with business intelligence to help them keep abreast of changes and other developments that might impact their business.

Technowledge Asia is the exclusive partner and distributor of The Yankee Group's analysis and planning assistance service in Asia-Pacific, and conducts annual studies in Singapore, Malaysia, Philippines and Hong Kong.

About The Yankee Group
The Yankee Group is internationally recognized in technology research and strategic advisory services, and a subsidiary of the Primark Corporation, recently acquired by Reuters. Its analysis encompasses areas crucial to e-business success, such as: the Internet, electronic commerce, communications, wireless/mobile, computing, and enterprise applications.