The Influence of SMMEs Internal Factors on E-commerce Adoption: A South African Perspective

Abstract

In South Africa, there is evidence of continued growth of internet users. This signifies that there is an increase of potential internet users who may be interested in conducting online transactions. The South African government, recognizing the importance that e-commerce plays in SMMEs business, has introduced an initiative to stimulate SMMEs online presence. The Woza online1 is platform that enables SMMEs to create their website using the .co.za domain. This move echoes authors that suggested that in order to thrive in the increasing digital economic environment, SMMEs must have an online presence. Following the same trend, this paper seeks to contribute to the knowledge of SMMEs internal factors that need to be taken into consideration in order to stimulate the growth of e-commerce adoption by SMMEs in the South African context. To this end, a survey was conducted amongst 400 SMMEs in Pietermaritzburg and Durban areas. Based on literature search, the following factors were identified as internal factors that influence e-commerce adoption: Firm’s characteristics, Owner/manager characteristics and Internal IT capabilities. The influence of these factors on the adoption of the following 4 e-commerce was then assessed: i) customers payment by credit card through the SMME’s website, ii) customers placing orders through the SMME’s website, iii) providing customer services through the SMME’s website and iv) placing orders with suppliers over the internet. Using convenience sampling, data was collected by means of questionnaires administered to 400 SMME owners/managers. Usable responses were collected from 360 SMME owners/managers. This represents a 90% response rate. Findings reveal that SMMEs size, compatibility of e-commerce with company’s’ preferred work practices, compatibility of e-commerce with company’s values are the firm’s characteristics that influence e-commerce adoption in the selected SMMEs. In addition, Owner/Manager enthusiasm about e-commerce adoption is the Owner/Manager characteristic that significantly influences the adoption of e-commerce in the surveyed SMMEs. This characteristic is moderated by age in both locations. However, there is no significant relationship between internal IT capabilities and e-commerce adoption.

DOI: 10.5901/mjss.2014.v5n23p246