E-Commerce Adoption and the Dynamics of the SMEs Cluster: Evidence from Zhili Children's Garment Town, China

Despite the increasing importance of e-commerce adoption in a digital economy, its impacts on the functioning and dynamics of traditional industrial clusters are not yet touched. This exploratory study of the actual practices of e-commerce adoption and its impacts on a traditional town-based cluster in China unfolds an intriguing trajectory that does not conform to popular perceptions of e-commerce studies. It is found that e-commerce adoption neither depreciates local production networks between clustering SMEs nor changes the way of knowledge circulation and utility within the cluster. Trust relations created by geographical and relational proximity cannot be achieved by either electronic communications or online transactions. However, e-commerce adoption does start to alter the inter-dependent relationship between clustering firms and local specialized market by diversifying marketing channels of clustering SMEs and more easily targeting and accessing to individual customers. Findings of this research contribute to the debate over the pattern of trust-building in a digital era and to the discussion on local buzz and virtual buzz.