Key Success Factors Facilitating SME E-Commerce in Developing Countries: Literature Review

Introduction

E-commerce provides a lot of advantages as a platform for conducting business. It supports business transaction effectiveness, potential ‘24/7’ sources of income, international sales, and easy showcasing of bestselling items as well as buying encouragement (Einav et al., 2014). Further, e-commerce technologies enable both small and large enterprises to progress their business practices and communications, both within the organization and with external business associates (Chong and Pervan, 2009).

E-commerce has also encouraged emerging countries which have the potential to attain fast and sustainable economic and social development by building e-commerce economies where small and medium sized enterprises (SMEs) are truly networked with the system (UNDP, 2004). SMEs have grown in prominence in the world’s economy during the last several decades and some theoretical and practical business development literature acknowledges the strategic contributions of SMEs to the development of both domestic and global economic growth. This reality is not simply defined by the number of SMEs, which constitutes approximately 90% of all business establishments around the world, but also their important role in generating employment prospects (Hall, 2002).

In many developing countries Internet practices and e-commerce applications have yet to attain a critical mass in network performance to sufficiently motivate SMEs to select e-commerce developments (Rahayu and Day, 2017, Hatten, 2015). Notwithstanding, governments are enabling development of, and enacting regulation in, e-commerce which is an important aspect to support SMEs effectively and positively affect the aggregate economy in developed countries (Triandini et al., 2015). However, government support for SME e-commerce has been a serious problem in developing countries which has affected growth (Rahayu and Day, 2017, Kapurubandara and Lawson, 2006).

Previous research concerning e-commerce application for SMEs has been mostly conducted in developed countries (Daniel, et.al., 2002) with only a few concerned about SMEs in emerging countries. Research relating to e-commerce last mile delivery and distribution (e.g. Lim et al., 2018, Melacini et al., 2018, Mangiaracina et al., 2019) has encouraged the importance of logistics operation on e-commerce applications, however those studies are based in developed countries which has different circumstances compared to developing countries. Likewise, the few empirical investigations concerning additional logistics activities such as reverse logistics for e-commerce (e.g. Sorkun, 2019, Hjort et al., 2019) were also focussed on developed countries instead of emerging countries. Further, the limitations on infrastructure, information and communication technology (ICT), payment systems, customer behaviour and other conditions, has provided our motivation to investigate how SMEs should adopt e-commerce in developing countries (Kurnia et al., 2015, Williams et al., 2009, Parker and Castleman, 2007).

Additionally, most of the earlier studies focussed on pre-adoption problems as the e-commerce growth stage was at an initial phase in the early 2000s (MacGregor et al., 2002, Dwivedi et al., 2009). The pre-adoption stage is when e-commerce is first applied in business applications and research has focused here on identifying issues and difficulties in pre-adoption of ICT related to business e-commerce. However, the rapid growth of ICT has already led to a post-adoption focus categorising the specific effects and problems that happen after the adoption stage has been well established and investigated. Earlier studies had a tendency to investigate the issues that enable (or consider the obstacles that challenge) e-commerce adoption rather than adoption or implementation benefits and advantages and post-adoption issues (Molla and Heeks, 2007, Alyoubi, 2015, Sukasame et al., 2008, Intan Salwani et al., 2009, Kurnia et al., 2015, Kabango and Asa, 2015, Rahayu and Day, 2017).