New figures show that 22% of Irish SMEs are completely offline, despite half acknowledging that an online presence is important for generating business awareness.
The figures are contained in a new research report from the IE Domain Registry (IEDR), the company responsible for managing and maintaining Ireland's official domain name - .ie
According to the research, 68% of the SMEs with no online presence believe there is simply "no need" to have a website.
When probed further, respondents said that this is because most of their business is word-of-mouth (78%), while others said that they already have lots of business (23%) or are happy with the scale of their business (17%).
While many SMEs believe there is no need to have an online presence, others simply struggle to get online.
A third said a lack of time is keeping them offline, while 29% blamed a lack of expertise and 26% said the cost is a factor.
However, IEDR research shows that 83% of consumers think SMEs should have at least a basic website that lists contact details, while 68% believe a business is "outdated" if it does not have an online presence.
The IEDR also said that 71% are more likely to buy from a business that has a website.
The IEDR research also showed that among the SMEs that are online, few can engage in e-commerce with 30% able to take sales orders or process payments, while just 29% can accept bookings or reservations online.
Only 37% of SMEs promote their businesses online, spending an average of €161 per year on search engine and social media marketing.
The IEDR said that encouragingly, 20% of SMEs say they are currently in the process of building a website, up sharply on the 8% recorded in the last research.
The number of businesses which said that they have no plans to build one in the near future has dropped from 66% to 57%.
David Curtin, the chief executive of IEDR, said that while it is very encouraging to see more SMEs with websites, most are failing to take advantage of the full benefits of an online presence and e-commerce.
"Less than a third of businesses with websites can take sales orders or process payments via their website, yet Irish consumers are buying online in huge numbers," he stated.
The e-commerce market is set to grow to €14 billion by 2021, but most of that spend is predicted to go abroad.
"With so many international retailers online and offering complete shopping experiences already, offline SMEs in this country face an uphill battle winning back the loyalty of Irish consumers. This is a huge and ongoing loss, considering Irish consumers' willingness to buy Irish," Mr Curtin added.
Meanwhile, the issue of Brexit appears to have done little to spur offline SMEs online.
85% of those surveyed said that the UK's vote to leave the EU had not increased their likelihood of building an e-commerce-enabled website, compared to 6% that said it had.