E-COMMERCE ADOPTION AND THE ENHANCEMENT OF MSME COMPETITIVENESS IN INDONESIA

Abstract

Digital transformation has positioned e-commerce as a strategic instrument for micro, small, and medium-sized enterprises (MSMEs) to expand markets, improve efficiency, and sustain business continuity. This article synthesizes evidence on the role of e-commerce adoption in enhancing the competitiveness of Indonesian MSMEs. A narrative review was conducted on 17 Scopus-indexed full-text articles. The initial search identified 42 documents, which were narrowed to 31 articles, 28 studies with an Indonesian context, 22 open-access articles, and 17 downloadable articles included in the analysis. The literature was examined according to research design, business context, adoption drivers and barriers, and consequences for performance and competitiveness. The synthesis indicates that e-commerce adoption is generally associated with wider market reach, higher sales, operational efficiency, productivity, customer engagement, and sustainability performance. These benefits, however, are conditional upon technological readiness, management support, digital competence, entrepreneurial and market orientation, financial literacy, product innovation, and the integration of social media and live-streaming. External conditions—particularly infrastructure, platform regulation, certification, and fair competition—also shape whether digital access becomes a competitive advantage. E-commerce should therefore be understood as a strategic capability rather than merely a sales channel. Empowerment policies should move beyond counting MSMEs onboarded onto platforms and focus on the depth of technology integration, analytics, differentiation, and digital ecosystem governance.