NZ small firms ramp up spending on online business

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Small firms are ramping up ICT spending as they shift more business online because of Covid-19.

Research from accounting software firm Xero shows information and communications technology spending has increased 25 percent compared to pre-pandemic levels.

The growth is higher than Australia and the United Kingdom.

Xero New Zealand and Pacific Islands managing director Craig Hudson said it was a marked difference to how local businesses used to approach ICT.

“It’s shocking how many businesses before Covid didn’t have even a website, for instance, or a retail shop that didn’t have an e-commerce.

“Now they all need to and most of them have, because they’ve needed it because no one was coming into their shop any more.”

While New Zealand led post pandemic growth, it fell behind the UK when it came to the share of expenditure, Xero said.

In the UK, 4.4 percent of total small business expenses went to ICT, whereas New Zealand’s spending was at 2.9 percent and Australia was further behind at 2.4 percent.

The top 25 percent of small business ICT spenders experienced an average sales jump of just over $20,000 last year, the report said.

The bottom 25 percent saw sales fall $24,000 over the same period.

“The data in the report is clear – the businesses embracing technology are pushing ahead, while the businesses who don’t are being left behind,” Hudson said.

SOURCE: RNZ News

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