Small businesses are still unaware of the power of taking their business online and risk falling behind due to a lack of education, the Malta Chamber for Small and Medium Enterprises (GRTU) has warned.
“Expertise can be bought, but the biggest issue is that businessmen are not yet seeing the benefits,” said Marcel Mizzi, GRTU vice-president for finance and administration.
“The problem is that a lot of them don’t buy online themselves, so they assume nobody buys online.”
The GRTU has recently published a handbook, which is being distributed free to small companies, offering practical tips on taking their business online. The thinking behind getting the information out in book form, according to Mr Mizzi, was to reach an audience of businesses who are, by definition, not online.
Nevertheless, the book is supplemented by an online learning app on the GRTU website, which includes simple video guides on everything from picking a domain name to managing social media and building an online presence.
“We’ve kept it simple and accessible to the layman; for a lot of businesses, simply learning all the terms is already an obstacle,” said Mr Mizzi, who is also a member of the Digital Malta governing board, which oversees the implementation of the government’s digital strategy.
The GRTU’s efforts are part of a broader drive to bridge the digital divide for small businesses. According to MCA figures, although 69 per cent of businesses claim to have a website, only 14 per cent were selling online in 2013, with the remaining sales taking place mainly through traditional stores.
For a lot of businesses, simply learning all the terms is already an obstacle
Moreover, surveys carried out by the GRTU have found that businesses which fared poorly in 2015 largely blamed competition from the internet – but only two per cent of those said they were planning to go online this year.
The problematic situation was highlighted by a European Commission report this week which ranked Malta 13th among EU countries for the use of digital technology by businesses. The report said local businesses still needed to better exploit the possibilities offered by Electronic Information Sharing, eInvoices and eCommerce.
“Businesses need to change their mindset as a whole to become more digital,” Mr Mizzi said. “It’s not an easy thing; just getting people to come for the conferences and workshops we organise on the subject is an effort. But once they come they take to it very enthusiastically.”
Marcel Mizzi from the GRTU: “The problem is that a lot of them don’t buy online themselves, so they assume nobody buys online.”Mr Mizzi highlighted a number of areas where businesses could easily step up their online efforts, from a lack of faith in social media advertising (which he described as the most effective marketing ever devised), to not investing enough in skilled web developers, to relatively minor issues like not putting prices for their products online.
Nevertheless, Mr Mizzi believes that Maltese businesses have every chance of competing with other online businesses – currently perceived as one of the biggest challenges – given the right education and support. “Marketing is marketing; it’s not just about the lowest prices,” he said. “It’s like a brick-and-mortar shop – you put together an overall package to attract people. That’s just what you have to do; you can’t offer people a low-quality experience and expect them to flock to you.”
With its current campaign (financed through EU funds), the GRTU worked hand-in-hand with the Malta Communications Authority and the parliamentary secretariat for competitiveness and economic growth, as well as other entities.
In future, the GRTU is hoping to work towards more schemes to help businesses go online, including a ‘Buy Local’ campaign, a directory of online businesses, as well as the possibility of obtaining EU funds to help businesses develop their websites.
Mr Mizzi, however, also pinpointed areas where more needed to be done to provide the right atmosphere for businesses to thrive. One of these issues is international postal rates, a longstanding bone of contention as rates from Malta to abroad are often significantly higher than the corresponding rates from the same location to Malta.
“What that means is that, for Maltese businesses, selling anything to Europe under €100 simply isn’t feasible,” he said. “This is something that needs to be addressed for local businesses to be able to compete effectively.”
Malta 11th in EU digital index
Malta has been ranked 11th out of 28 EU countries in the Digital Economy and Society Index published by the European Commission this week.
The country is performing best in terms of connectivity, where the report noted that all Maltese households were found to be covered by fixed broadband with a minimum speed of 30Mbps.
Malta’s overall score was above the EU average and was placed in the ‘running ahead’ cluster of countries, having developed faster than the EU as a whole. In terms of human capital – the number of citizens engaging with the internet – Malta improved its ranking by two places. The index shows that while only 52 per cent of Maltese individuals have at least basic digital skills (slightly below the EU average), the level of engagement is relatively high.
Malta outperformed the rest of the EU in terms of online banking and shopping, while on the business side, the index reported that more than a quarter of enterprises use social media. Just over a tenth of small businesses are selling online to other EU member states, a relatively high figure relative to other countries.
The country was found to be lagging behind on take-up of mobile broadband and the availability of government data online.
In a statement, parliamentary secretary for competitiveness and economic growth José Herrera welcomed the report, which he said was the result of good work by the Malta Communications Authority and the IT agency (MITA).
“It is through this effort and momentum that the government launched the Digital Malta Strategy with a considerable number of initiatives that are resulting to be successful,” Dr Herrera said.