The internet may be global. But for Australian web-based merchants it's more a case of think local, act local.
Online businesses in Australia make the vast majority of their sales to customers in the same town and don't capitalise on the worldwide nature of the web.
The annual Sensis e-Business Report said that 87 per cent of small and medium size enterprises (SMEs) with an online presence sold goods and services to local customers.
The figure was unchanged from the previous year.
Overseas customers were identified by just five per cent of SMEs as their main e-commerce customer group.
This was a two per cent increase on the previous year.
Some 27 per cent of SMEs reported at least some sales to overseas customers, unchanged from the previous year.
Report author Christena Singh said the report showed that Australian small business were grappling with how to use the internet to target overseas customers.
"E-commerce offers SMEs the opportunity to reach a potentially global market, so it is interesting to note most sales made using e-commerce are still relatively close to home," Ms Singh said.
"If small businesses want to make the most of the new world of mobile and internet-enabled customers, they really need to think strategically and put in place a strong digital business plan."
Although 62 per cent of SMEs had a website for their business and 27 per cent use social media for business purposes, only 15 per cent had a digital business strategy, the report found.
Despite this, 55 per cent of SMEs reported that they had recovered their initial investment in e-commerce and a further 17 per cent expect to recover their investment in the next year.
When asked what concerned them about e-commerce, Australian small businesses nominated internet security as their number one issue.
More than one in four SMEs (27 per cent) said a lack of computer expertise and knowledge was a major burden, an increase of five percent over the past year.
A lack of personal contact with customers, the cost and time to introduce new technologies and the cost of hardware and software were issues raised by at least one in five SMEs.
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