Implementation Of Electronic Commerce ( E Commerce ) On Small Medium Enterprise ( Sme )

1292 Words Oct 27th, 2014 6 Pages
Implementation of electronic commerce (e-commerce) on Small Medium Enterprise (SME)

In this globalization era, new businesses are emerging and developing very rapidly where competition between businesses is becoming more aggressive. Raymond, Bergeron and Blili (2005) mentioned that todays’ market is more effective and efficient since the use of technology that has eliminated distance and time. This situation may impact on small business or known as Small and Medium Enterprise (SME) to compete with bigger business. In order to survive and stay competitive, SME implements various strategies, such as adopting internet-based or web based (e-commerce) strategy in their business. Many studies argued that e-commerce is very useful for SME in
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In their study, they provide Iran and Malaysia as examples. In Iran, business that has 10 to 49 employees is categorized as SMEs. In Malaysia, the number of employees needed to be categorized as SME is between 5 to 19 employees. It can be seen SME’s definition cannot be defined in general, because each country having its own parameter in defining SME.

E-commerce is a web-based service of trading activity including buying and selling products and services (Jagoda, 2010). Many studies found that e-commerce influences SME performance. According to Abebe (2014), their findings show that there is a significant relationship between e-commerce and SME performance. They mentioned that by implementing this application, SME performance would improve. In addition, Jahanshahi et. al. (2012) argued that in order to measure an organization performance, generally the aspects need to be considered are financial performance, operational performance and market based performance. Based on their survey, the result indicated that e-commerce adoption has positively impact operational performance (product/service quality), and market-based performance (marketing effectiveness). However, Jahanshahi et. al. (2012) mention that e-commerce adoption does not show a significant impact on SME’s financial performance (business income/profitability). Thus, it is evident that e-commerce is important for SME, but may not guarantee the increase in
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