Evaluating the Critical Determinants for Mobile Commerce Adoption in SMEs in Developing Countries: A Case Study of Vietnam

Evaluating the Critical Determinants for Mobile Commerce Adoption in SMEs in Developing Countries: A Case Study of Vietnam

Ngoc Tuan Chau (University of Economics, The University of Danang, Danang, Vietnam & RMIT University, Melbourne, Australia) and Hepu Deng (School of Accounting, Information Systems and Supply Chain, RMIT University, Melbourne, Australia)
DOI: 10.4018/978-1-7998-2610-1.ch006

Abstract

This chapter presents a review of the related literature on organizational mobile commerce (m-commerce) adoption, leading to the development of an integrated model for evaluating the critical determinants of m-commerce adoption in small and medium-sized enterprises (SMEs) in developing countries. Grounded in the innovation diffusion literature and the extension of the technology-organization-environment framework, the model, integrates technological, organizational, environmental, and managerial factors holistically for better understanding m-commerce adoption in a developing context. Eleven hypotheses are proposed and tested using multiple regression with the data collected from a survey with SMEs' managers in Vietnam. The results confirm the significance of factors in the above four dimensions. These findings provide the managers of SMEs with useful insights on how to improve the adoption of m-commerce in SMEs. These are also useful for policymakers in designing policies that promote the wide adoption of m-commerce in SMEs in the context of developing countries.
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Introduction

Mobile commerce (m-commerce) is related to the transactions involving the transfer of the ownership of goods and services with the help of mobile devices (Khalifa, Cheng & Shen, 2012; Njenga, Litondo & Omwansa, 2016). It is an extension of electronic commerce (e-commerce) from wired to wireless devices as well as from fixed locations to anywhere and anytime transactions (Coursaris, Hassanein & Head, 2008). In this chapter, m-commerce is simply about buying and selling of goods and services through wireless handheld devices such as cellular phones and personal digital assistants (Zhiping, 2009; Njenga et al., 2016; Chau & Deng, 2018a).

M-commerce is becoming increasingly popular due to a variety of benefits that it can provide businesses including improving productivity, increasing customer satisfaction, and lowering operational cost (Chau & Deng, 2018b; Duan, Deng & Luo, 2019). It is becoming a cost-effective way for businesses, especially small and medium-sized enterprises (SMEs) to promote their products and services online (Alfahl, Houghton & Sanzogni, 2017). Consequently, there is a significant increase in revenue in m-commerce in the global market from $1.357 trillion in 2017 to $1.804 trillion in 2018, and such revenue is predicted to surpass $2.321 trillion for 2019 (eMarketer, 2018).

Our literature review on organizational m-commerce adoption reveals that there is a huge difference in the adoption of m-commerce between developing countries and developed countries (Chau & Deng, 2018a). While m-commerce has had a high level of adoption in developed countries, it has not been popularly adopted in developing countries (Nafea & Younas, 2014). In Vietnam, for example, a national e-commerce survey in 2018 indicates that only 11% of enterprises in which 90% of them are SMEs conduct their business transactions via e-commerce applications. There are, however, only 13% of these enterprises adopt m-commerce (Vietnam eCommerce and Digital Economy Agency, 2018). The difference in the adoption of m-commerce between developed countries and developing countries is also reflected in the total sales achieved respectively in different countries. For example, the business-to-customer e-commerce sales (including m-commerce sales) in the United State and Australia were recorded at around $421.1 billion and $10.6 billion respectively in 2017. This is in direct contrast to those sales in Thailand and Philippines at $3 billion and $1.2 billion respectively, and only at $6.2 billion in Vietnam in the same year (Vietnam eCommerce and Digital Economy Agency, 2018).

SMEs are a distinct group of organizations with their specific characteristics (Duan, Deng & Corbitt, 2012). These characteristics make them more flexible in adopting technological innovations. The flattened structure of SMEs, in particular, enables much fast decision making in the adoption of a specific technology. There are, however, several critical factors including the lack of ICT skills (Huy, Rowe, Truex & Huynh, 2012), the lack of financial resources (Hamdan, Yahaya, Deraman & Jusoh, 2016), small management team, strong owner influence, centralized power and control, multifunctional management, lack of control over business environment, limited market share, low employee turnover, reluctance to take risk (Seyal & Rahman, 2003), and the dependence on business partners (Stockdale & Standing, 2004) that often pose numerous challenges in their adoption of technological innovations. Although the adoption of such technological innovations can effectively develop their business, the financial, technological, and human resources constraints cause SMEs to lag behind large enterprises in this regard (Alqatan, Noor, Man & Mohemad, 2017).

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