Sep 5, 2012

57 percent Indian SMEs use websites as a sales channel: Google

Indian SMEs are reaping the benefits of using the Internet to grow their business. According to a recent study conducted by Google India, more than 57 percent of SMEs use their website as a sales channel and to get direct business leads.                  

While accessing email is the number one purpose for using the Internet, a majority of SMEs (71 percent) also use the Internet to search for vendors and suppliers. About 40 percent of them use the Internet to create online listings and advertise online. In terms of mediums used to advertise, traditional media like newspaper and outdoor ads still lead the advertising spends for SMEs, but Internet is emerging as one of the fastest growing medium for advertising with 58 percent of SMEs with websites using the Internet to generate business leads.   
Amongst the SMEs who have an online presence, 56 percent of them feel that the Internet is a cost effective medium as compared to traditional advertising medium like print and television. 79 percent of SMEs believe that Internet advertising can provide greater reach. A closer analysis of the marketing spends of the SMEs reveals that SMEs with marketing spends between Rs 25-70 lakh per annum tend to spend higher on the online medium and rely less on traditional media like print and television. But majority of the spends (43 percent) comes from SMEs who spend between 12 to 25 lakh on advertising on an annual basis, reflecting the low cost benefit of the Internet.
Sridhar Seshadri, Head of Online Sales, Google India said, “While the absolute number of SMEs with an online presence is very low compared to actual businesses in India, we’re pleasantly surprised to see increasing understanding amongst Indian SMEs to use the web for business growth. In the last two years we have seen a significant increase in the number of businesses that have started to advertise online. But with over 35 million SMEs in the country, we have a long way to go. Google India is working on a number of programs to educate more SMEs on how they can get online and use the Internet as a primary sales channel.”
Among all the SMEs surveyed, SMEs from Insurance, Technology B2B, IT Hardware, and Travel & Tourism spend around 30-45 percent on online marketing.  Annual average online spends are high among SMEs from Media & Entertainment, Gems & Jewellery and Apparel. Additionally, Banner/Display Advertising and Email Marketing are the most popular form of Internet advertising and 30 percent SMEs use search engine advertising to market their product and services.