Small and medium-sized businesses in Asia-Pacific hesitant to embrace digital platforms
Aug 20, 2019
BEIJING, TOKYO and JAKARTA, Indonesia; Aug. 20, 2019 – Small and medium-sized businesses (SMBs) in Asia-Pacific (APAC) are hesitant to embrace digital tools, citing issues including inadequate support, high costs and complexity as leading barriers to adoption, according to a new report from Accenture (NYSE: ACN).
Based on a survey of 1,500 executives across SMBs in China, Indonesia and Japan, the report — “Driving New Growth for APAC SMBs: Realizing the Platform Opportunity” — found that many SMBs do not see the value in platforms and online tools.
Even though consumers are active users of online platforms, two-thirds (68%) of the SMBs surveyed do not plan to increase digital spending for sales, marketing, customer service or e-commerce tools; among them, one in six (17%) is actually planning to decrease their digital spending in these areas. This is despite the fact that there are more than 500 million active mobile payment users in China and digital transactions in Indonesia nearly quadrupled between 2014 and 2017, according to the report.
“SMBs are the world’s most powerful growth engine and make up 98% of all businesses in China, Indonesia and Japan,” said James Kim, managing director of Accenture’s Software & Platforms industry practice in Asia-Pacific. “For platform companies, this presents a potential market opportunity in Asia-Pacific. Creating successful outcomes for SMBs will require helping them overcome perceived barriers to adopting digital platforms.”
Nearly half (45%) of all respondents also identified privacy and security concerns as a top barrier to adopting digital platforms. Other concerns included lack of customer support for marketing tools (cited by 44% of respondents), uncertainty with the relevancy of data analytics (38%), and high service charges for payment tools (37%), among others.
When the non-digital SMBs were asked why they hadn’t yet adopted digital platforms, nearly three-quarters (72%) cited uncertainty about whether digital platforms would help their business, two-thirds (65%) cited the expense and difficultly of implementing and maintaining the platforms, and more than half (55%) cited their lack of skills and experience needed to manage digital platforms.
The survey found that digital tools were most commonly used in the marketing function — cited by 88% of respondents in Indonesia, 77% of respondents in China and 62% of respondents in Japan — significantly more than for sales, payments and customer-service functions.
“Since customers of SMBs are increasingly embracing digital channels to engage and transact, SMBs would be wise to embrace digital as well,” Kim said.
To that end, the report recommends three steps that platform companies can take to help promote SMBs’ adoption of digital tools:
- Educate SMBs on the value of platform capabilities through early training and onboarding initiatives. Platform companies need to take time to understand the pressures their SMB customers are under — and make sure their interactions and educational outreach to them is relevant.
- Provide simpler, more-tailored support. Because SMBs need simple and intuitive ways to prioritize resources and save time, platform companies should design simple, straightforward support capabilities to provide personalized, one-to-one mentoring. “As-a-service support” options — designed to match platform capabilities to an SMB’s unique needs — could provide frictionless implementation and help SMBs experiment confidently with new digital trends.
- Champion trust as a competitive advantage. Platform companies must empower SMBs to know how, where and why their data was used in the personalization framework and make clear what they will get in return. They should allow SMBs to act when data about them and their business is wrong by designing for transparency and enabling them to recalibrate algorithms.
About the report
Accenture surveyed 1,500 executives at small and medium-sized businesses in China, Indonesia and Japan across nine industries: consumer goods, electronics and communications, IT services, retail, wholesale, financial services, health and education, professional services, and transportation. The businesses had, on average, 79 employees, two locations and been in business for 18 years. The online survey was conducted in August 2018.
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