Barriers to e-commerce adoption: evidence from the retail and food and beverage sectors in Malaysia

Abstract

There is a continuing interest in small and medium enterprises (SMEs)' e-commerce adoption, especially from South-east Asia, including Malaysia. The objective of this study is to examine the key determinants of SMEs embracing e-commerce in the retail and food and beverage sector in the Klang Valley. Using a Logit model, the findings show that organisational barriers are the most important barriers to SMEs' adoption of e-commerce, followed by environmental barriers. The findings imply that one-size-fits-all policies should not be used since the barriers are different between adopters and non-adopters and the scale of their operations. Analysis within variables between adopters and non-adopters using a decision-maker, technology, organisation-environment framework indicates that young leaders are important in adopting e-commerce. Importantly, technology is not everything when it comes to e-commerce adoption. It matters more to small firms. Therefore, policy needs to take firm heterogeneity.