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Most Arab businesses missing online business opportunities, says Google

Dubai: More than two-thirds of small and medium companies in the most active Arab economies don’t have their own websites and are missing the economic value of their internet presence, a Google research has concluded.

The research results, which were revealed yesterday during a press meet, was based on surveying 1,500 privately-owned companies in the UAE, Saudi Arabia and Egypt. The selected companies were small and medium size ones with a maximum of 250 employees.

“More than two-thirds didn’t even consider having a website and the penetration of small and medium businesses (SMBs) online remains very low. Only 18 per cent of SMBs in the UAE are online, while small businesses in KSA and Egypt register at 15 per cent and 7 per cent respectively,” highlighted the survey, which was presented by Tarek Abdullah, Head of Marketing, Middle East and North Africa at Google.

“A lot of business owners see the web as a place for entertainment and social interaction, such as sharing pictures and sharing thoughts, (but) not as a place to make business,” Abdalla explained to Gulf News.

Many businesses question the benefit of advertising in a place they believe is mainly for entertainment, he added.

“The danger is that this is actually a perception that is false … with (such high) level of usage and this level of internet penetration of nearly 70 per cent………and if that gap is not filled by a local consumer company that understands consumers best, it will be filled by global companies who are doing a great job and services in these countries’ markets,” Abdalla said.

Asked about the region’s potential for online businesses, he replied by saying they are “phenomenal, phenomenal.”

However, the survey showed that most small and medium businesses “don’t find online advertising to be expensive or complex, they simply don’t understand its benefits,” Google said.

The majority of surveyed businesses said they were unsure how their internet presence will help them grow their businesses. The percentage was 92 per cent in UAE, 90 per cent in Saudi Arabia and 80 per cent in Egypt.

Interestingly, many businesses do have a social networking page. In the UAE, the percentage of business with a social networking page is 15 per cent, compared to 5 percent of those with a website.

Google, Abdalla explained, can play an important role in boosting online businesses in the region. It “can build an eco-system (e-Commerce system), raise awareness among SMBs about the opportunities that they are missing if they are not getting online,” as well as training people on developing the eco-system and how to use Google services, he added.

Google’s study noted that shoppers are increasing among internet users, while e-commerce has recorded a double growth in the last two years and is expected to become a $15 billion (Dh55 billion) industry by 2015.

Growing Internet use

Internet users in the region are expected to grow to 141 million by end of 2013 (35 per cent of total population).

Smartphone usage in the GCC is amongst the highest globally. Penetration in the UAE is 74 per cent and 73 per cent in Saudi Arabia.

Six per cent of the total advertisement market in Middle East and North Africa (Mena) region is digital — compared to 1 per cent four years ago.

Advertisement spending on TV today is nearly 48 per cent.

The SMBs who do advertise online consider it to be cost-effective, easy and user friendly. Their percentage is 62 per cent in Saudi Arabia and 61 per cent in Egypt.