Think local: Google explains how businesses can get a piece of Australia’s $189 billion online market

Figures published yesterday by the Australian Bureau of Statistics show online business in Australia is up 32% on last year with Australian businesses receiving online orders worth $189 billion.

However, search giant Google has warned many SMEs are not online and not optimised for local search, the area which is booming.

The ABS figures show that just as over half of Australian businesses reported placing orders via the internet, a 9% increase from 2009-10 and the proportion of businesses that reported receiving orders via the internet increased by 13% to 28%.

Half or more of the businesses in the wholesale trade and manufacturing industries reported receiving orders online while 35% of retail businesses did.

The ABS figures also show that businesses reporting a web presence increased from 40% to 43%.

However, many small business owners have yet to fully embrace the web with only a third of businesses with four employees or less having a web presence.

This compared to 97% of big businesses; with businesses in the arts, recreation services, information, media, and telecommunications industries having the highest proportion of businesses with a web presence.

Businesses in the transport, postal and warehousing sectors had the lowest web presence, with only 22% having a website.

Claire Hatton, head of local business at Google Australia, told SmartCompany the ABS figures showed the opportunity for businesses that came from having an online business.

“Having a website is more important than having a phone now. You need to be there for consumers where they are looking for you, otherwise they will find your competition,” she says.

“Whether you’re a pizza restaurant or the newsagent around the corner; it’s never been more important to be online.”

Hatton says it is unclear why many small businesses are not getting online.

“There might be a fear factor for getting online and probably a time factor. They are busy people and [it takes] time to set up a website,” she says.

Although Google will not provide information on the volume of searches conducted for business online, Hatton was willing to state percentages. The percentages point to the increased importance of local search for business.

“Our searches are increasingly becoming very local, as one in five Google web searches in Australia are now local,” says Hatton.

“When it comes to mobile devices, it is more like one in three searches. It means people are on the go, using their mobiles to search and looking for mobile information. So it is very important for businesses to be online.”

Hatton says while Google is unable to provide estimates of the future use of local search, she expects its importance will only continue to increase alongside the growing number of smart phones.

“The mobile penetration of smartphones is increasing and we expect it to be over 70% by the end of the year,” she says.

Hatton says this is a “huge opportunity for retailers” and cites the example of retailer The Party People, which is now Australia’s leading online retailer for party supplies.

“They were a very traditional offline store but got online relatively early in 1999. They’ve just opened up another offline retail store, which shows it’s not like there’s just one or the other,” says Hatton.

“Online is where consumers find information. They are now in a good position to have more information than they have ever had before; they are searching for information that allows them to make good decisions,” Hatton says.

Hatton says Google uses Google maps to assist business in capitalising on local search results.

“Google Maps is a very large property search where people go to search. Maps is integrated into our search experience and we are constantly searching for the right information to give people,” she says.

However, Hatton remains tight-lipped on the challenge to the dominance of Google Maps from Apple’s decision to launch its own mapping service on all its devices.

“We don’t have any comment on that,” she says.