New Zealand lags behind in uptake of social media

News release

21 November 2011
New Zealand lags behind in uptake of social media

Businesses in New Zealand lag behind the rest of the world in the use of social media, according to the latest findings from Grant Thornton's International Business Report (IBR).

The research reveals that 38% of businesses in New Zealand use social media in some capacity compared with a global average of 43%.

Greg Thompson, Partner of Grant Thornton New Zealand said that New Zealand also trails neighbours Australia, where 44.9% of businesses use social media, and the United States with 46%.

“We are ahead of the United Kingdom at 32.2%, but surprisingly, we are well behind Latin America where 52.7% of businesses use social media, and the BRIC countries (Brazil, Russia, India, China) at 50%,” Mr Thompson said.

For New Zealand businesses, the key reasons for using social media are advertising at 30%, 20% recruitment, 6% to communicate with suppliers, 24% to communicate with customers and 12% for staff communications.

Globally advertising is the most common reason companies use social media (53%), followed by communicating with customers (51%) and recruitment (43%). Advertising is the most common use in the EU (64%), whereas recruitment came top in North America (63%). Meanwhile, communication with customers emerges as the key practice in Latin America (72%) and ASEAN (65%).

“The results are a wake-up call to business leaders reluctant to embrace digital opportunities. A recent study by Cisco Systems Inc.’s Economics & Research Practice estimated that global e-commerce, including travel and auto purchases as well as online retail sales, will increase 13.5% annually for the next four years and reach an estimated USD1.4 trillion in 2015.

E-commerce is transacting or facilitating business on the Internet. Popular examples of ecommerce revolve around buying and selling online and any other form of online business transaction including internet connection capabilities, delivery services and payment systems.

Social media is all about communicating and sharing information and building relationships with your key target audiences.

“The IBR results are fascinating to note. They show businesses in emerging markets embracing social media much faster than their peers in mature markets. They appear to have much more faith in the impact that an active social media presence can have on their relationships with clients, with customers, and ultimately on their bottom line.

“Interestingly, business use of social media appears to mirror economic health. The emerging markets, where pickup is highest, are experiencing strong growth, whilst the problems facing Europe are well-documented. Social media use is clearly not the cause of Europe’s economic woes, but the research points to a split in mindset and attitude towards new ways of thinking and working.

"Use of the internet among the wider population in the emerging markets still lags behind Europe and North America, but the sheer size of those populations represents a huge market and therefore an enormous opportunity. In China for example, there are 485 million internet users, which is only 36% of the current population. In India less than 10% of the population access the internet. The challenge to the rest of the world’s business leaders, including New Zealand, is clear: catch-up, or lose out.

“Social media is of particular importance to New Zealand businesses because of our geographic location. Understandably, many businesses are preoccupied with the current economic difficulties, but they shouldn’t lose sight of the longer-term opportunities social media offers. It is inexpensive and far reaching, allowing remotely located businesses to stay in touch with customers and suppliers,” he said.

Greg Thompson said that it is important not to decide to use social media just because it is the “next big thing.”

“Make sure that it meets your marketing and communication objectives; select the right social media for your brand and make sure you are resourced to manage and maintain your communications.

“It is essential that you recognise that once content is published online it will always be visible somehow. Even deleted social media accounts will turn up in search engine results as they are archived by a server network,” he said.

ENDS

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