12.02.2017 – 10:00
German SMEs still make very little use of digital sales channels
Frankfurt am Main (ots)
- KfW study: only 16% of SMEs rely on e-commerce - Share in total turnover is still low - Retailers, wholesalers and young businesses are pioneers
E-commerce, the selling of products using online channels, still plays only a minor role in the German SME sector. A representative study conducted by KfW Research on the basis of the KfW SME Panel shows that small and medium-sized enterprises currently generate only EUR 153 billion a year through digital channels - a mere 4% of the SME sector's overall turnover. Only a small portion of SMEs, 16%, currently auses the opportunity to deliver their products or services to their customers online. In other words, eight in ten SMEs are not yet generating any turnover through digital channels. But KfW's analysis also shows that the digital transformation is slowly but surely reaching SMEs. The newer a company is in the market and the younger its owner is, the more important e-commerce is for its turnover.
According to estimates by KfW Research, transactions with businesses (B2B business) currently make up the biggest share of digital turnover of SMEs by far, at EUR 144 billion. Component supplies in the engineering and motor vehicle industry play the biggest role here. In retail consumer business, all German SMEs combined generate only EUR 9 billion through e-commerce. For comparison, Amazon, the biggest online retailer, sells products worth around EUR 8 billion annually in Germany alone.
Trading companies are the digitisation pioneers among SMEs, which is hardly surprising. One in three retailers and wholesalers conduct e-commerce - either in direct contact with the end consumer or as another company's supplier. Their share of online turnover is the highest, accounting for 25% of the SME sector's overall turnover. In all other sectors the online sales channel is much less important. Among the SME service providers, some 13% are active in e-commerce and the turnover they achieve through this channel is 17%.
Even if the SME sector has not yet fully embraced e-commerce, whether or not an enterprise uses this mode of trading makes a significant difference for its performance. KfW's analysis revealed that small and medium-sized enterprises with extensive e-commerce activities are more optimistic about the future and have higher turnover growth. Recently, the mean turnover growth rate of SMEs with considerable online turnover (more than half) was as high as 15% - almost four times that of businesses without e-commerce turnover (4%). It also showed, however, that the strong competitive pressure in online business is having an impact, narrowing companies' range for setting prices and thereby adversely affecting their profitability. According to the KfW survey, the average profit margin of small and medium-sized enterprises with e-commerce is around 4% while that of SMEs without e-commerce is 8% - twice as high.
"Across much of the SME sector, digital selling is still in its infancy. But that also means small and medium-sized enterprises are not yet making enough use of the opportunities e-commerce offers for business", said Dr Jörg Zeuner, Chief Economist of KfW. "Even if not every sector is equally suited for e-commerce, businesses on a broad front face evolving customer needs. Both end consumers and business customers increasingly demand permanent availability, fast delivery times, real-time advice, individual offers, user-friendliness and mobile capability. Digital sales channels could provide the answers for many SMEs. In addition, turnover can be generated online that would not have materialised through classic channels - for example by tapping into new, digitally savvy customer groups or expanding the sales area into new regions."
The current special analysis of the KfW SME Panel on the topic of e-commerce is available at www.kfw.de/fokus (English version forthcoming).
The figures refer to the year 2015 as these are the most up-to-date representative data.
Original content of: KfW, transmitted by news aktuell