BrazilSMEs in Indonesia, China and Japan remain reluctant on digital adoption
Small and medium-sized businesses in China, Indonesia and Japan remain largely unconvinced by the unfolding digital revolution according to a new Accenture survey.
In a survey of 1,500 executives representing small and medium-sized enterprises (SMEs) in China, Indonesia and Japan (businesses on average with two locations and around 80 staff, covering nine sectors including IT, retail, financial services, health and education), professional services firm Accenture has found that close to three quarters of those yet to adopt digital platforms were unsure of their value, with effectively none of them planning to invest.
Altogether, 22 percent of the SMEs surveyed weren’t using any kind of digital sales, marketing, service or ecommerce platforms at all. When quizzed, in addition to the to the 72 percent which were unsure if digital platforms could enhance their business, a further 65 percent perceived platforms as expensive and difficult to implement and maintain, while more than half (55 percent) of non-digital SMEs don’t believe they have the necessary skills and experience.
According to Accenture’s research, this reluctance runs counter to the revenue growth rates experienced by those SMEs which have adopted digital tools – said by the firm to be on average at twice the pace of non-movers on 2017 figures and almost certainly rising. So ever the more puzzling: the nearly seven in ten of all SMEs which stated that they do not plan to increase digital spending on new tools, and the 17 percent which were in fact intending to reduce outlay.
“Despite evidence that moving beyond single use of proprietary websites dramatically improves the probability of benefiting from multi-platform tools, speed to serve customers, access to new markets and frictionless payments – the vast majority of these SMBs are not planning to improve their digital footprint in 2019,” Accenture’s analysts stated. “The gap is widening and will continue to do so for those that do not improve the value of digital enablement.”
As it stands, businesses were most commonly adopting digital tools for their marketing function, cited by 88 percent of respondents in Indonesia, 77 percent in China, and 62 percent in Japan (also recently found to lag brands in other Asian nations for digital performance). These rates were significantly higher than use in the areas of sales, payments and customer-service functions. Here, Accenture points to the 500 million active users of mobile payments in China alone.
As per the survey, 45 percent of all respondents further identified privacy and security concerns as a barrier to adoption or digital expansion, while nearly the same number again cited a lack of customer support for marketing tools. High service charges for payment tools were also widely noted, as was a general uncertainty as to relevancy of data analytics. All in all, Accenture believes this is not just a missed opportunity for SMEs, but also platform companies in APAC.
“SMEs are the world’s most powerful growth engine and make up 98 percent of all businesses in China, Indonesia and Japan,” said James Kim, managing director of Accenture’s Software & Platforms industry practice in Asia-Pacific. “For platform companies, this presents a potential market opportunity in Asia-Pacific. Creating successful outcomes for SMEs will require helping them overcome perceived barriers to adopting digital platforms.”
Here, the firm recommends three broad steps for platform companies to aid adoption; educate SMEs on the value of platform capabilities while taking time to understand the pressures they are under; provide simpler, more-tailored support to help SMEs prioritise resources and save time; and champion trust as to data collection, making clear what SMEs get in return for sharing their data and proving to them that its use doesn’t outweigh the value they get from doing so.
