Authors: Assistant Professor Ramesh M
Abstract: Micro, Small and Medium Enterprises (MSMEs) constitute the mainstay of developing economies and contribute immensely to job creation and GDP growth. Yet, their digital transformation, especially through the adoption of e-commerce, has been far from consistent, with several challenges being faced in terms of technology, organizational capability, and environmental factors. This paper offers a comprehensive empirical analysis of the adoption of e-commerce by 1,200 MSMEs operating in the manufacturing, retail, and service sectors in India. By employing a combined methodology of surveys, interviews, and financial performance analyses, we examine the determinants of adoption (benefits, competitive pressure, top management support) and the impediments (infrastructure deficiency, digital literacy, costs, and security threats). The adoption of e-commerce is found to generate a 28% increase in income, a 22% decrease in customer acquisition costs, and a 35% extension in the geographic reach of their operations. Still, adoption is uneven, with micro enterprises falling behind.
