The effects of ICT adoption on marketing capabilities and business performance of Indonesian SMEs in the fashion industry

The purpose of this paper is to investigate factors influencing the adoption of ICT among SMEs, to examine the influence of ICT adoption on marketing capabilities, and to analyze the influence of marketing capabilities on business performance among Indonesian SMEs in the fashion industry. A questionnairebased survey was employed to collect data from 204 SME owners/managers. The results suggest that complexity, trialability, and observability are among the technological factors that have a significant influence on ICT adoption. Research advantage and compatibility do not influence ICT adoption. Meanwhile, organizational factors such as owner/manager knowledge and innovativeness significantly influence ICT adoption among SMEs. Environmental factors such as competitive pressure, institutional intervention (excepting market turbulence) contribute significantly to the adoption. Moreover, data analysis reveals that ICT adoption has a positive influence toward SMEs’ marketing capabilities. Finally marketing capabilities significantly influence a firm’s business performance. The findings contain valuable insights that could educate owners/managers of SMEs about the potential gains they will get by adopting the cost-effective capabilities of Internet adoption for their businesses. This study also provides justification and recommendations for government and lawmakers to foster the growth of SMEs in Indonesia by building more IT-related infrastructure and developing necessary skills to enhance SME business performance.