E-Commerce Adoption and its Determinants: The case of Micro and Small Enterprises (MSEs) in Bole Sub-city, Addis Ababa

Abstract

Electronic commerce can enhance the economic function of information and promote the development of the information industry. The electronic-commerce is beneficial for micro and small enterprises in least developed countries to improve the competitiveness and performance, internet-related technologies. This study, therefore, examines the adoption of electronic-commerce and its determinants in Addis Ababa, Bole sub-city. The data used for the study were collected from 294 (Adopter of electronic commerce-149 & Non-adopters-145) randomly selected respondents. To achieve the stated objectives both descriptive and econometric analyses were employed as a tool. The descriptive analysis indicated that the tools of the features of e-commerce are easy, the top management, the government, vendors are not playing an important role for the adoption of electronic commerce. Lack of electronic-payment system, absence of governmental support, lack of skilled worker to implement e-commerce, the low access to computer technology, slow internet penetration and internet access and low level of customer awareness are some challenges of using e-commerce. The econometric result revealed that Education, Relative advantage, Organizational readiness, Customers awareness, Government support have positive significant effect on the adoption of electronic commerce while Cost concerns and Complexity of electronic commerce have a negative significant effect. The researcher has recommended that the government should support the adoption of electronic commerce in the sector, organizations’ must be ready to implement the adoption of e-commerce and the micro and small enterprises should hire or train their employees’ for the adoption of electronic commerce.