Determinants of E-commerce Adoption by MSMEs: An Empirical Analysis in Odisha

Abstract

This article aims to examine the adoption of e-commerce by micro, small and medium enterprises (MSMEs) in Odisha. The quantitative survey approach was employed for the conduct of this research. A structured questionnaire was used to obtain the data from a sample of 100 representative MSMEs across the two administrative blocks in the Khordha district of Odisha. The relationship between the variables in this study was analysed by using binary logistic regression technique. The study found that most of the MSMEs had engaged in at least one form of e-commerce level, which is less than the desirable level. Further, the study provides an understanding of the factors responsible for e-commerce adoption by MSMEs in the district. The study found that three variables, that is, the number of staff with IT knowledge, interest to accept e-commerce and size of the business, are the major determining factors that influence MSMEs in adopting e-commerce. Significant challenges hindering e-commerce adoption among MSMEs in Khordha as identified in this study include problems with online banking, speed of the internet, lack of government support, problems in logistic support and lack of IT-qualified staff. Attention should continue to focus on improving the technical infrastructure needed to operate e-commerce and there is a need for media publicity to increase public awareness to push customers and employees to make use of e-commerce. The role of the government is also crucial in providing assistance and training that can help the use of e-commerce in the district.