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Digital business growth in New Zealand – 64% of SMEs state that all or most of their business is now virtual

Published on 25/01/2021 by Sonia Navarrete

study about digital business growth in New Zealand

Now it’s clear that remote work is here to stay, with Gartner predicting 48% of employees working remotely at least part of the time even after the pandemic, the spotlight on digital transition and acceleration is brighter than ever.

Research on digital business growth in New Zealand

Nearly a year into the monumental shift to remote and hybrid work models, business leaders have been convinced by the productivity gains achieved through collaboration and online meeting software.  In fact, Gartner estimates that the worldwide IT spending is projected to total $3.8 trillion in 2021, an increase of 4% from 2020.

With the economy quickly bouncing back from the COVID slump, and business and about the year ahead due to the news of promising vaccines, organisations are continuing their digital transformation journeys.

This goes beyond just enabling remote working; digitalisation is picking up pace across different aspects of business operations, including marketing, sales, logistics, and customer service. Organisations are now more open than ever to the use of innovative technologies to achieve their strategic business goals post-pandemic.

To gain insight into digital business acceleration, GetApp recently surveyed 608 business leaders of small to medium-sized (SME) companies in New Zealand (the full methodology is available at the bottom of the article).

Almost two thirds of Kiwi SMEs surveyed conduct business virtually due to COVID-19

Our survey shows that since the pandemic began, most organisations are now conducting at least some of their business processes on digital platforms. A total of 64% of SMB leaders state that all or most of their business is now virtual, compared to just 2% who fully relied on virtual platforms pre-pandemic.

growth of digital business

74% of businesses surveyed reported significant website traffic from new regions

Businesses are experiencing higher levels of digital interaction, with 72% seeing increased website traffic since the start of the crisis. The shift to virtual platforms has also led to a more diverse customer reach, with 74% of businesses reporting that half or more of this new traffic is from regions or countries where they hadn’t previously operated.

new website traffic from new areas

This insight supports data from the New Zealand Post in a study of eCommerce trends. Amongst a range of statistics showing increases in eCommerce activity, it was found that much of this growth came from regional areas like Taranaki, Northland, and Gisborne— places that have traditionally been s lower to embrace online shopping.

73% of Kiwi businesses find software implementation as the major challenge in going digital

Businesses are increasingly turning to technology to achieve their short and long-term goals. Across 2021, the top goals are broadly consistent, with customer retention, cost-cutting, and increasing cash flow in both the first quarter and throughout the year.

Business goals new zealand smes

While 89% of businesses believe they have been successful transitioning to digital environments, particularly when it comes to using social media and websites to interact with customers, they have also encountered challenges along the way.

27% of businesses state they have been “very successful” engaging with their customers digitally, while 62% feel “somewhat successful” in doing so. However, respondents also said there were challenges while moving their businesses away from traditional models to digital platforms.

The top challenges were upgrading and implementing new software (73%) and training employees to use it (72%).

challenges of taking digital business

70% of businesses believe they need to keep up digital investments to compete

The measures taken to combat COVID-19 domestically in New Zealand have significantly accelerated the shift towards digital transformation and virtual workplaces.

Reflecting on 2020, fewer than half of businesses (45%) feel that they would have failed without a pandemic-driven investment in digital technologies. But looking ahead to the future, 70% of organisations said they need to keep investing in digital systems to keep up with their competitors.

These are the digital skills organisations anticipate needing most in the next six months:

  • Website and app development (44%)
  • Project management (39%)
  • Social media marketing (35%)
  • Cybersecurity (32%)
  • Business intelligence/Data analytics (29%)
  • Agile decision-making (26%)
  • Content creation (18%)
  • Online customer service (16%)
  • Graphic design (12%)
  • Product development (11%)
Looking to optimise your digital transformation strategy? Check out our catalogue.

Survey methodology

Data for this study was collected in December 2020 from an online survey of 608 respondents that live in New Zealand.

To participate in the survey, respondents had to be:

  • Employed full-time in one of the following roles:
    • Owner, founder or other head of an organisation
    • C-Suite executive e.g. CEO, CIO
    • President of Vice-president
    • Director
    • Manager
  • Working for a company of up to 250 people
  • Working at the organisation during the COVID-19 pandemic

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.

About the author

Sonia is a Senior Content Analyst, helping SMEs choose the best software. She published in Raconteur, Computer Weekly and IT Pro. Journalist and PR. Nature, bike and dog lover.

Sonia is a Senior Content Analyst, helping SMEs choose the best software. She published in Raconteur, Computer Weekly and IT Pro. Journalist and PR. Nature, bike and dog lover.