Adoption of B2B e-Commerce in Developing Countries: Evidence from Ready Made Garment (RMG) Industry in Bangladesh

Abstract

The rapid adoption of e-Commerce, especially Business-to-Business (B2B) e-Commerce among Ready-made Garments (RMG) industry is a key opportunity for local and international trade development of developing countries like Bangladesh. However, although high expectations for realizing the benefits of B2B e-Commerce in RMG sectors, its adoption remains poorly understood and are a relatively under-researched area in Bangladesh. This study is an attempt to fill this gap. This study explores the factors that affect B2B e-Commerce adoption in RMG sectors of Bangladesh by using Perceived eReadiness Model (PERM). A questionnaire survey was used to collect data from over 250 RMG firms in Bangladesh. The data was analyzed by using the Partial Least Squares (PLS) method; a statistical analysis technique based on the Structural Equation Model. The study found that awareness, resources, government eReadiness, and market forces eReadiness were significant factors for initial adoption of B2B e-Commerce. However, commitment, governance, and supporting industries eReadiness are insignificant for initial adoption of B2B e-Commerce. Again, the relationships between resources, commitment, government eReadiness, market forces eReadiness, supporting industries eReadiness and institutionalization of B2B e-Commerce are significant in RMG sectors of Bangladesh. However, awareness, governance and institutionalization of B2B e-Commerce are insignificant. The output of the study can help RMG firms in Bangladesh to address the factors that influence adoption of B2B e-Commerce. This study can also help the policy maker and government to identify the promising local opportunities for B2B e-Commerce by discovering the distinctive e-Commerce adoption factors.