Internet opens up markets for SMBs like never before
SMBs must shift their mindsets; Google striving to make it easier for them to go online
IT'S common knowledge that small- and medium-businesses (SMBs) are the bedrock of many nations’ economies, but for the world’s most popular search engine Google, they are much more than that.
In fact, according to Loren Shuster, country head of Google Singapore and emerging markets, SMBs’ contribution to their respective economies is the prime engine that will take these very nations to the next level.
Speaking to the media at a regional briefing in Singapore recently, Shuster (pic) noted that it isn’t just because of the sheer number of SMBs represented in every country they exist in, but also because many of these companies are beginning to discover how consumers are flocking to the Internet and how they can capitalize on this by extending their marketplace, taking them global.
“More Asian [consumers] are coming online, and they are seeking information on products and services that they’re willing to pay for,” said Shuster. “SMBs can take advantage of this by expanding their businesses to reach markets they are not in.”
The search giant defines three categories for SMBs: Micro businesses which have fewer than 10 people; small, which have between 10 and 50 people; and medium-sized, with between 50 and 250 people.
Shuster said that currently, the Internet’s contribution to gross domestic product (GDP) in emerging markets stands at only at 1.9% compared with 3.4% in developed markets. This means that there was still a big gap between the two -- something that Asia can take advantage of, he added.
Citing studies conducted by Google, Shuster said consumers are looking to the Net for intelligence to help them make decisions.
For example, he said based on Google’s research, some 60% of consumers search for hotels online before deciding where to stay; 47% purchased their stay outright over the Net; 43% searched for real estate before purchasing or renting; and 43% researched for cars online before buying.
“This means that there are huge opportunities for SMBs because in an online [space], your customer base is as big as the number of people searching for you and for what you sell,” he pointed out. “SMBs can expand because of the reach of the Internet. They can target users who are online, and those who are interested in their products, and this makes the cost of advertising effective with a high return on investment.”
Transforming SMBs online
To gear up for this, Shuster said SMBs would also need to transform how their businesses operate, including how they find suppliers, offer customer service and how they reach out to customers.
Noting that search advertising allows SMBs to reach customers who are already looking for you, Shuster said the first thing an SMB could do, if its hasn’t already done so, is to set up a web presence to complement its physical store.
“This website should encompass video and social media capabilities, as well as ... cater to the mobile environment,” he said.
When asked what were the impediments holding back SMBs from going online, given that the value proposition is so clear, Shuster said there were a number of factors.
“These factors are kind of similar across different geo-locations. One of them is Internet and broadband penetration and another is the relatively higher cost of going online to get a domain.
“That’s why we at Google have been working with governments and domain registrars to reduce the cost of setting up online,” he said. “For example, we have our Get Malaysian Business Online initiative in partnership with the Malaysian Communications and Multimedia Commission (MCMC), My Domain Registry and iTrain, which was launched during the end of 2011."
Besides this, Shuster acknowledged that the other limiting factor is the conventional thinking of SMBs, many of whom do not understand what the Internet can bring to them.
“Google's mission is to elevate the understanding of the ecosystem, including that of SMBs, and to educate the SMBs that it's not so difficult to go online,” he said. “They should realize that the entire state, province, nation, region or world is their local market.”
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