A survey by the IE Domain Registry, which manages the dot-IE web address, h found that two thirds of SMEs do not have a digital presence.
This means that much of the ever increasing amount of money spent online is going to multinationals like Amazon and ASOS.
David Curtin, CEO of the IE Domain Registry, said that as Irish consumers demand is not being satisfied by Irish companies, they are drifting towards the likes of Amazon and Alibaba.
He said the risk for Irish business is that those consumers will not come back and the gap will continue to widen.
The loyalty of those customers moves from the local SMEs to the international platform, he added.