Six out of 10 small businesses are missing out on their share of a £20bn-a-year web shopping boom because they are not selling their products and services online, says BTTradespace, BT's specialist SME division.
Head of BT Tradespace Mick Hegarty said he commissioned research to discover how SMEs can best communicate and conduct business in the recession.
Hegarty said more people were using the web to shop in the recession because of the choice, convenience and cost savings it offered.
This had driven the web-based market to just under £20bn a year, according to market research firm Verdict. Online retail was set to reach £42.4bn by 2012 - 12.4% of total online spending - it said.
The research found that 66% of SME owners do not believe they can find customers on the internet, even though more than 69% shop online at least once a month.
Researchers said the number of SMEs with a website rose 20% between 2007 and 2008. Just 13% thought websites were integral to their marketing strategy and only 3% used their site to communicate with consumers. It found that 92% were aware of blogging but only 18% used it for business.
The research also found that the smallest companies (up to five employees) were least likely to interact with other local businesses. 47% admitted not knowing the companies in their area.
Hegarty said SMEs were missing out locally and internationally because they didn't use the internet. "Free business social networking websites and social media tools like blogging and podcasting can transform a company's fortunes at the click of a button," he said.