INHIBITORS OF THE ADOPTION OF E-COMMERCE BY SMMES IN TWO SOUTH AFRICAN CITIES

Abstract

SMMEs play a significant role in developing countries’ economies. Literature suggests that SMMEs stand to benefit more from e-commerce adoption than larger companies due to their flexible organisational structure. Such benefits include reaching a wider market compared to the traditional brick and mortar organisations. However, various authors suggest that e-commerce is not widely adopted within the context of SMMEs due to various factors that hinder them to take up or enhance their online businesses. It is in this context that this paper investigates factors that impede e-commerce adoption by SMMEs in the KwaZulu-Natal (KZN) province of South Africa. From a sample of 247 SMMEs owners conveniently sampled from two cities in KZN and using quantitative research methods, this paper tests the significance of identified factors from the literature as possible hindrances to SMMEs adopting e-commerce. Findings reveal that there are common significant relationships between e-commerce adoption and the following limiting factors in the two cities: low use of e-commerce amongst suppliers; low level of computerisation within the SMME; high cost of computers and network technologies; unreliable telecommunications services; concerns about Internet security and concerns about legal issues, contracts and liability. Thus, the paper recommends that SMMEs adopt a flexible organisation culture to promptly adapt to changes within their business environment; adequate support for SMMEs; government regulations and incentives that attract more SMMEs into the ecommerce venture.

Keywords

• SMMEs, e-commerce, inhibitors, Durban, Pietermaritzburg