Netregistry: Survey shows online business set to boom during the bust

Staff Writers
Monday, 16 February 2009 12:27

IT Industry - Market

Technology industry surveys and market studies seems to becoming thick and fast during the economic downturn, with several companies and industry bodies vying for space to let us all know just where they think the market’s heading in these tough times.

The latest survey, released today by Netregistry, an Australian provider of domains and associated services, reckons it has discovered that online business owners, who happen to be their own customers, are doing much better than the general business community. In fact, NetRegistry maintains that its study revealed “some stark differences between the two groups in their reactions to the world economic downturn.”

Larry Bloch, CEO of NetRegistry, says the online sector promises strong and steady growth in these times of economic uncertainty, with online business owners more confident about their business prospects in 2009. (46% versus 13%, or 3.5 times).

Bloch said the results of the survey, conducted in November 2008 by Sweeney Research for the Sensis Quarterly Business Index on behalf of Netregistry and Nett Magazine, showed that online business promises to be far more resilient and should see substantial growth through 2009.

“With significant year-on-year growth in online sales in 2008, particularly in the final quarter leading up to Christmas, online business seems to be defying all the economic trends. As budgets tighten and families stay home more, they are turning to the internet to find bargains. With fewer overheads, online stores often deliver more competitive prices than some major high street stores and consumers have been discovering the convenience of shopping without leaving the house."

Other headline results of the NetRegistry survey include:
• Online businesses are more likely to be planning expansion in 2009. 57% compared to 39%
• Online business performance indicators are higher. In all key areas – including sales, profitability, capital expenditure and employment.
• Online businesses are twice as likely to export. 28% compared to 15%
• Online businesses are more profitable:

Twice as likely as the average SME to be earning between A$51k-A$100k; as likely as the average SME to be earning between A$101k-A$500k; as likely as the average SME to be earning between A$501k-A$1m; three times as likely as the average SME to be earning over A$20m

Looking ahead for the remainder of this year, Netregistry said it expected to see a rise in the launch of online stores in 2009, with traditional retailers tapping into the online revenue stream and new businesses taking advantage of the low cost of internet business.