Impact of E-Commerce and Digital Marketing Adoption on the Financial and Sustainability Performance of MSMEs during the COVID-19 Pandemic: An Empirical Study

Abstract

The COVID-19 pandemic has remarkably affected the business processes and performance of micro-, small-, and medium-sized enterprises (MSMEs) across the world. MSMEs have had to adopt and implement numerous strategies to sustain their businesses, and their financial and sustainability performance has been impacted by their choice of e-commerce (EC) platforms and digital marketing (DM) strategies. The objective of this research was to explore the effects of EC and DM platforms and strategies on facilitating MSMEs’ financial and sustainability performance amid the devastating COVID-19 pandemic. This study gathered data from 212 MSMEs from three districts of Bangladesh. A partial least squares structural equation modeling (PLS-SEM) approach was undertaken, to test the hypothesized model. The findings revealed that e-commerce had a significant association with MSMEs’ financial performance and sustainability amid the pandemic. It was also observed that digital marketing strategies had a substantial impact on MSMEs’ financial performance. However, the linkage between DM strategies and MSMEs’ sustainability was found to be insignificant. Furthermore, it was found that the financial performance of MSMEs mediated the relationship between e-commerce adoption and their sustainability performance. These findings contribute to the extant technology adoption literature, by exploring the role of e-commerce and digital marketing on firms’ financial outcomes amid a global pandemic. Managers and policymakers of small businesses can learn several things from this study, and understand how crucial digital commerce and digital marketing are to their success and long-term survival.

Investigating the role of e-commerce application and digital marketing implementation on the financial and sustainability performance: An empirical study on Indonesian SMEs ,

“…According to Gao et al (2023), digital marketing is the strategy of promoting products or services using digital technology such as the internet, social media, search engines, email, and mobile devices. The history of digital marketing can be traced back to its earliest days on the internet when companies began to realize the potential of using websites to reach a wider audience.…”

Companies with at least 10 Employees Selling Online across the Italian Regions

“…The focus on the "new normal" is crucial, but continuous updates and research will be necessary as the post-pandemic business environment evolves. Gao et al (2023) assess the impact of e-commerce and digital marketing adoption on the financial and sustainability performance of MSMEs during the COVID-19 pandemic through an empirical study. This research is valuable for its timely investigation into how digital strategies have influenced business performance in a crisis context, highlighting the resilience and adaptability afforded by digital tools.…”

Impact of COVID-19 on Small and Medium-sized Enterprises (SMEs) in Bangladesh: An Owner-centric Study

“…A study by Sarker et al [38] stated that SMEs that diversified their products and services had a greater chance of surviving the pandemic. Gao et al [39] found that SMEs that adopted e-commerce during the pandemic reported an increase in sales. In addition, Qamruzzaman [40] identified that SMEs' sales increased following the formation of partnerships during the pandemic.…”