Digital Business Development Strategy as a Determinant of Business Competitiveness Through E-Commerce of MSMEs Products in Indonesia

Abstract

This study aims to explain and analyze the impact of product innovation and social media on business competitiveness through e-commerce of MSME products to bridge the gap. The population under this study includes e-commerce MSMEs customer community located in 27 districts / cities in South Sulawesi and East Java Provinces including Palopo City, Pare-Pare, Makassar, Batu, Malang, Surabaya, Kediri and Madiun, Bulukumba Regency, Sinjai, Bantaeng, Takalar, Gowa, Tana Toraja, Luwu, Maros, Pangkep, Soppeng, Wajo, Banyuwangi, Blitar, Bojonegoro, Gresik, Kediri, Lamongan, Magetan, and Malang which amounted to 22,296,873 e-commerce MSME customers in South Sulawesi and East Java Provinces. The sample used in this study, namely 500 respondents / customers, using probability sampling techniques or multistage random sampling or determination of cluster sampling based on the division of an area / region in stages. The analytical technique used for hypothesis testing is Amos structural equation modeling (SEM). The results show that product innovation has one indirect significant effect on e-commerce of MSME products, social media has an indirect significant effect on e-commerce of MSME products. Product innovation has a significant effect directly on business competitiveness. Social media has a significant effect directly on business competitiveness and e-commerce of MSME products has a significant effect directly on business competitiveness.