Digital Transformation in Entrepreneurship: Analysis of E-Commerce Utilization by MSMEs in Indonesia to Enhance Competitiveness

Abstract

The rapid advancement of digital technology has significantly transformed the entrepreneurial landscape, particularly for Micro, Small, and Medium Enterprises (MSMEs). This study examines the impact of e-commerce adoption on MSMEs in Indonesia, focusing on its role in enhancing market expansion, revenue growth, and operational efficiency. The findings indicate that 76% of MSMEs have integrated e-commerce platforms, leading to an average revenue increase of 45% in the first year, while reducing operational costs by 30%. However, challenges such as limited digital literacy, capital constraints, cybersecurity risks, and platform dependency continue to hinder widespread adoption. Case studies reveal that MSMEs that actively engage in digital marketing strategies and leverage multiple e-commerce platforms experience higher sales performance and customer retention rates. This study highlights the urgent need for targeted policy interventions, including digital literacy training, financial support programs, and improved regulatory frameworks, to ensure an inclusive and sustainable digital transformation for MSMEs. By addressing these challenges, Indonesia can strengthen its MSME sector, fostering a more resilient and competitive digital economy.