Almost a quarter of Irish small and medium-sized companies are completely offline, despite half of them acknowledging that an online presence is important for generating business awareness, according to a new report by the IE Domain Registry (IEDR).
The research further found that of those SMEs which do not have a web presence, 68pc of them felt that there was "no need'" to have a website.
When questioned in further detail, 78pc of SMEs that are offline said that the majority of their business is word-of-mouth, while others said that they already have lots of business.
Meanwhile, 17pc said that they were happy with the current scale of their business.
Interestingly, of those surveyed, more cited concerns over cyber security (17pc) rather than a lack of a reliable internet connection (13pc) as being a deterrent to them having an online presence. Only 17pc of SMEs which are offline said it was because they saw no value in having a website.
However, consumer attitudes in Ireland towards an online presence are completely at odds with firms which see no value in having a web presence.
The IEDR research found that 83pc of Irish consumers feel that SMEs should have at least a basic website that lists contact details, while 68pc believe that a business is "outdated" if it doesn't have an online presence.
A massive 71pc of consumers surveyed for the latest research said that they are more likely to buy from a business that has a website.
And while the majority of SMEs are online, it's a concern that few are actually engaging in e-commerce.
When it comes to taking sales orders or processing payments online, only 30pc of online SMEs are able to do this, while just 29pc are able to accept bookings or reservations online.
Meanwhile, only 37pc of SMEs promote their businesses online, spending an average of €161 per year on search engine and social media marketing.
"While it is very encouraging to see more SMEs with websites and improved confidence in their digital assets, most are failing to take advantage of the full benefits of an online presence and e-commerce," David Curtin, chief executive of IEDR, said.
With the Irish e-commerce market set to grow to €14bn by 2021, according to the Virgin Media Digital Insights Report 2016, Curtin warned that most of this spend is predicted to go abroad.
"We live in an age of convenience. With so many international retailers online and offering complete shopping experiences already, offline SMEs in this country face an uphill battle winning back the loyalty of Irish consumers.
"This is a huge and ongoing loss, considering Irish consumers' willingness to buy Irish," he said.
Despite this, the odds are stacked in Irish businesses' favour, with 77pc of consumers saying that buying Irish is important to them.
The research also found that there is reason to be optimistic. The latest edition of the IEDR dot ie Digital Health Index shows an overall improvement in Ireland's digital health, with the Index score rising to 45.4, the second highest since research began in 2014.
The biannual research report assesses the number and quality of digital assets owned by 500 Irish SMEs, like websites, social media pages and e-commerce tools. IEDR is the company responsible for managing and maintaining Ireland's official domain name (ie).
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