The Effects of E-Commerce Adoption on Small and Medium Enterprises Performance: Service, System, and Information Quality Perspectives in Tanzania.

Abstract

This study examined the effects of e-commerce adoption on small and medium enterprises' performance: service, system, and information quality perspectives in Tanzania, a case study of the Ilala Municipal Council. It was guided by three independent variables, namely e-commerce information quality, e-commerce system quality, and e-commerce service quality as independent variables, while e-commerce use and e-commerce user satisfaction were mediating variables. The study used a cross-sectional survey research design and adopted a positivist philosophy, a deductive approach, a quantitative mono-method, and a survey strategy. The population of the study was made up of 25,860 SMEs, whereby a sample of 385 SMEs was selected by using a simple random sampling technique, whereby the entire sample responded. The study's primary data were collected by using closed-ended questionnaires measured on a five-point Likert scale. The study used a structured equation model for data analysis and found and concluded that there is a strong and widespread acceptance and use of e-commerce. On assessing the usage of e-commerce among SMES, the studies have found and concluded that 82% of the respondents strongly agree with the usage of e-commerce. On examining the influence of e-commerce information quality on enhancing small and medium enterprises' performance, the study has found and conclude that there is insignificant direct influence of e-commerce information quality on e-commerce use (B = -0.11, p-value > 0.05). The study has found and conclude that e-commerce use has a positive significant influence on performance of SMEs (B = 0.39, p-value < 0.05). The study also has found and concluded that e-commerce information quality has a positive statistically significant influence on e-commerce. user satisfaction (B = 0.260, p-value = < 0.05). Furthermore, the study has found and concluded that e-commerce user satisfaction has a statistically significant positive influence on SMEs’ performance (B=42, p-value<0.05). On examining the influence of e-commerce system quality on enhancing the performance of SMEs, the study has found and concluded that e-commerce system quality has a positive statistically significant influence on e-commerce use (B=30, p-value<0.05). The study has found and concluded that e-commerce use has a statistically significant positive mediating influence on the performance of SMEs (B=39, p-value<0.05). The study also found and concluded that e-commerce system quality has a positive statistically significant influence on e-commerce user satisfaction (B = 19, p-value < 0.05). Additionally, the study has found and concluded that e-commerce users' satisfaction has a positive significant influence on the performance of SMEs (B = 42, p-value < 0.05). Examine the influence of e-commerce service quality on enhancing small and medium enterprises' performance; the study has found and concluded e-commerce service quality has a positive statistically insignificant influence on e-commerce use (B=0.027, p-value>0.05). Additionally, the study has found and concluded that e-commerce use has a positive statistical significance influence on the performance of SMEs (B=0.39, p-value=<0.05). The study also found and concluded that e-commerce service quality has a positive statistically insignificant direct influence on e-commerce user satisfaction (B=0.06, p-value>0.05). On the other hand, the study has found that e-commerce user satisfaction has a positive statistically significant influence on the performance of SMEs (B=42, P-value<0.05). Based on the study's findings and conclusions, the recommendations are as follows: The study findings have practical implications for Tanzanian SMEs. Firstly, the widespread adoption of e-commerce offers a favorable environment for digital business growth, urging SMEs to further embrace it for market expansion and efficiency. Secondly, prioritizing e-commerce information quality—accuracy, reliability, and completeness—is crucial for enhancing user satisfaction and, consequently, SME performance. Investing in content quality fosters trust with online customers. Furthermore, the study highlights that e-commerce system quality significantly influences use and SME performance. Hence, SMEs should focus on system functionality, reliability, and user-friendliness, along with regular maintenance and updates. Lastly, while e-commerce service quality may not directly impact use or user satisfaction, it remains vital. SMEs should excel in providing customer service, prompt issue resolution, and efficient order fulfillment, as they contribute to overall customer experience and brand reputation, which is vital for long-term success. The summary is coherent; no changes needed. In terms of theoretical implications, the findings of the study contribute to our understanding of information system success theory within the context of Tanzania. System use and user satisfaction emerge as pivotal elements in comprehending the relationship between e-commerce system quality and SME performance. The study's confirmation of the positive influence of e-commerce information quality on user satisfaction aligns with the core principles of information system success. Theory, emphasizing the significance of accurate and reliable information in enhancing user satisfaction. The study's policy implications are significant for the Tanzanian government, particularly the Ministry of Technology and the Ministry of Trade and Industry, in collaboration with municipal councils such as Ilala. They focus on strengthening the connection between ICT and SMEs and formulating policies to empower MSEs in utilizing e-commerce effectively. Firstly, government support is crucial for enhancing digital literacy and skills among SMEs, including training in digital marketing, online security, and e-commerce platform usage. Secondly, promoting data accuracy and reliability in e-commerce through quality standards and capacity building is essential. Investments in robust digital infrastructure, such as broadband accessibility and cybersecurity, are highlighted to improve e-commerce system quality and user satisfaction. Lastly, while e-commerce service quality may not have a direct impact, encouraging SMEs to prioritize excellent customer service is recommended, supported by municipal councils and government resources. These measures collectively aim to strengthen SMEs in Tanzania's evolving e-commerce landscape.