The number of Maltese businesses selling online is at a virtual standstill with the uptake almost the same as last year, a survey of Maltese and Gozitan business has revealed. However, online and digital marketing continues to grow in importance, especially on social media.

The percentage of companies doing only traditional marketing to promote their company has dropped from 45 per cent last year to 36 per cent this year

The survey was published by the Malta Communications Authority (MCA) and completed by M. Fsadni & Associates with the intention of taking a snapshot of how local businesses use computers and internet and to obtain detailed statistics on e-commerce in Malta. This survey, with the same methodology, has been carried out for the past few years and therefore allows for comparisons.

Around 700 interviews with local businesses were proportionately distributed among seven business sectors according to the actual number of companies within each sector. The sectors are: wholesale and retail; financial intermediation, business activities and communications sector; manufacturing and construction; community and social services, personal service activities, health and social work; real estate and rental; hospitality and tourism; and transport and storage.

The percentage of businesses that stated that internet is their main sales channel has marginally dropped from 14 per cent in 2012 to 13 per cent this year. Interestingly enough there was a jump forward in terms of the phone being used as the main sales channel, from 12 per cent last year to 18 per cent this year. Walk-in trade remained the most important form of business, slightly down from 65 per cent to 64 per cent this year.

The main reason given for not selling online is that the product is not suitable, fol­lowed by lack of time and a host of other less important reasons which arenot identified in the report.

Credit cards, followed by debit cards and third-party payment systems like PayPal are mentioned as the most common methods of payment. However, cash on delivery is still very important and each sector seems to have its own preferred methods.

The survey also revealed that 78 per cent of interviewees are not aware that the Malta Communications Authority is the regulator of e-commerce in Malta.

The number of companies with their own website is slightly up from 67 per cent to 69 per cent, with the absolute majority claiming they have had it for more than three years. The importance of the company website is also highlighted by the fact that almost all companies that do sell online do it through their own website. Fewer than one per cent use other Maltese or international websites. Those who don’t have a website say they don’t feel the need to or don’t have the time to set it up.

When respondents were asked to indicate for what purposes their company uses the computer, 80 per cent mentioned that they use both computer and internet for their business. Another 12 per cent indicated that the company does not use either computers or internet for business. Internet usage mainly consists of sending and receiving e-mails, doing research and internet banking.

E-government services provided by the VAT Department, the Inland Revenue Department and for tendering are among the most utilised e-government services but the type of service depends on the nature of the business.

Transport companies use the CVA online payment services while real estate businesses are fairly heavy users of Mepa’s e-services, unlike other sectors.

The most significant progress has been registered in terms of online marketing, where there is a clear shift from traditional towards online marketing, especially the use of social media like Facebook and Twitter.

The percentage of companies doing only traditional marketing to promote their company has dropped from 45 per cent last year to 36 per cent this year. On the other hand, companies doing only digital/ online marketing has increased from 14 per cent to 17 per cent.

The hospitality and tourism sector, followed by real estate, use online marketing the most. Facebook’s popularity as a medium for promotion has jumped from 76 per cent last year to 85 per cent this year, followed by search engine marketing. Twitter is another favourite social network but it far behind Facebook in terms of usage. These gains were made at the expense of display advertising and e-mail marketing.

The main reasons for engaging in online marketing are getting broader exposure and the fact that this kind of marketing is less expensive than the traditional means.

The survey presentation is available from the MCA’s website www.mca.org.mt.

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