Improving SMEs’ competitiveness with the use of Instagram influencer advertising and eWOM

Abstract

Purpose Under Saudi Vision 2030, there is a forthcoming raise of support to small- or medium-sized enterprises (SMEs) from the current 20 per cent of GDP to 35 per cent; thus, SMEs’ access to finance is becoming easier. At the same time, the cosmetics retail industry is expected to rapidly grow further in the next few years, on account of the already mounting demand and easy availability of cosmetics through online channels. The purpose of this study is to explore the use of beauty Instagram influencers in advertising as a tool to increase competitiveness for SMEs. Design/methodology/approach An exploratory research design was used and in-depth interviews were conducted to get a better understanding of female Saudi young adults’ perceptions with regards to trust towards Instagram influencers, electronic word of mouth (eWOM) and advertising. Findings SMEs can benefit greatly from eWOM in their quest for competitiveness. Therefore, when a beauty influencer on Instagram advertises a product to SMEs followers this leads to increased awareness and purchase intention. The findings indicated that the participants are quite sceptical when receiving reviews or promotion from beauty influencers on social media, as they rarely regard them as authentic. Moreover participants seem to trust influential beauty Instagrammers when they had a positive experience with the influencer before. Trust, honesty and authenticity were important factors that increase the impact of eWOM. Originality/value This paper offers an in-depth understanding of the use of Instagram advertising and eWOM in a rapidly developing industry and explores these as key communication pathways for modern SMEs in their effort to achieve resilience and competitiveness.

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