Only 15 per cent of Maltese companies who took part in a recent survey said they sell online. The rest claimed their products are not suited for such a medium, and they also mentioned lack of expertise, difficulties in implementing payment facilities, set-up costs and lack of time for not opting for e-commerce.
However even the results of those who use e-commerce are not at all encouraging, with 39 per cent claiming that less than 10 per cent of the total company sales come through e-commerce and another 23 per cent admitting that they do not know what is this percentage.
Only 14 per cent of companies interviewed use exclusively digital marketing channels, while another 23 per cent use a mix of digital and traditional channels.
This is the snapshot of a study commissioned by the Malta Communications Authority and conducted among local businesses earlier this year by M. Fsadni & Associates (MF&A). The aim was to evaluate computer and internet usage and to obtain detailed statistics on e-commerce in Malta, with a focus on computer and internet usage, the use of e-commerce to sell products and marketing channels.
The results were presented at the MCA’s eCommerce Forum organised yesterday. The aggregate 708 interviews were done with local businesses in the wholesale and retail sector, financial services, communications services, manufacturing and constructions, community, health and social services, and the real estate, transport and hospitality and tourism sectors.
Almost 65 per cent of the interviewees stated that the primary sales channel used by the company to sell products/services is by walk-in trade, where customers visit the company’s premises. Only 14 per cent stated that the internet is the main sales channel the company uses while 12 per cent mentioned the phone as the main sales channel.
When all respondents were asked to indicate for what their company uses the computer, 84.5 per cent mentioned the use of e-mails, followed by 60 per cent who indicated internet banking and by 48 per cent who specified research on the internet.
Companies in the financial intermediation, business activities and communications sector and in the hospitality and tourism sector are the ones who use the computer and internet the most. Companies in health and social services use computer applications, while retail and transport sectors see the least use of computers.
While 67 per cent have a website, mainly to display information about the company and its offerings, three out of every four website owners said their website has been successful in achieving its original objective. Some 63 per cent have had the website for more than three years. However 46 per cent do not gather statistics about their website.
Those who do not have a website said they do not feel they need one, or do not have time or the expertise to set-it up.
The study reveals that 15 per cent of the companies interviewed do e-commerce through the company’s own website (13 per cent), through other Maltese websites (one per cent) or through other international websites (one per cent).
E-commerce is done mainly by companies in the hospitality and tourism sector followed by companies in the transport and storage sector and by those hailing from the financial intermediation, business activities and communications sector.
Companies falling in the community and social services, personal service activities and health and social work sector and in the manufacturing and construction sector are the companies which do the least e-commerce.
A relatively high 39 per cent of those who engage in e-commerce claimed that less than 10 per cent of the total company sales come through e-commerce. 19.6 per cent reported between 11 and 50 per cent and 16 per cent of respondents reported between 50 and 100 per cent sales online. However another 23 per cent stated that they do not know what percentage of sales is received through e-commerce.
A very high 71 per cent of the company respondents pointed out that the initial motivation to start selling online was to reach a wider audience. Moreover, according to more than 40 per cent, competition from business rivals was the initial motivation while 30 per cent claimed that the need to develop new sales channels was the reason why the company started selling online. Reduction in costs and increase in revenue were also mentioned.
Almost 63 per cent, of the 107 company respondents who do e-commerce, communicated that the company offers its e-commerce customers the credit card payment facility, more than 40 per cent offer cash on delivery and 28 per cent indicated that the company offers its e-commerce customers the debit card payment facility. PayPal, very popular with Maltese buying from eBay, was also offered by a small percentage of businesses.
A staggering 88 per cent of the companies indicated that they sell their products services to customers in both Malta and Gozo, almost 60 per cent pointed out that the company sells products/services to customers in EU countries and 51 per cent also sell outside the EU.
Thirty three per cent could not point out any challenges/difficulties faced with e-commerce. Nevertheless, 14 per cent claimed that providing the right price to clients while 13 per cent indicated that engaging customers is a challenge faced by the company with e-commerce.
More than 41 per cent of the respondents who indicated that the company does not sell its products/services online said that the primary reason for this is that the company’s products/services are not suitable for online selling. This was not so closely followed by nine per cent who indicated that lack of time, while eight per cent indicated that lack of expertise is the main reason. Nevertheless, difficulties in implementing payment facilities, set-up costs and lack of time were also specified as reasons.
A rather high 64 per cent of the company respondents stated that the company carries out financial transactions with other business partners and internet is used extensively in business-to-business activities.
Unfortunately, 69 per cent of the companies who do e-commerce are not aware that the MCA is the regulator of e-commerce in Malta. In terms of marketing, the survey confirmed that the Maltese companies still rely heavily on traditional channels. More than 45 per cent of the aggregate 708 survey respondents said they use traditional marketing only. Another 23 per cent stated that the company uses both digital/online marketing and traditional marketing and 14 per cent indicated that the company uses digital/ online marketing only for promotion purposes. Those who rely on digital marketing only said they rely heavily on Facebook, much more than e-mail or display advertising. 43 per cent said they do their advertising/marketing in-house.
The full report is available from www.mca.org.mt