FACTORS AFFECTING E-COMMERCE ADOPTION BY MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES IN INDONESIA

Indonesian Micro, Small and Medium-sized Enterprises (MSMEs) plays some important roles such as becoming a contributor to Gross Domestic Product (GDP) with approximately 57.5% of the national GDP, absorbing employment up to 97.2% of the total national labor, and the total MSMEs was around 56.5 million units or 99.99% of the total national enterprises in Indonesia. Based on national retail sales data in 2014, it was found that 0.6% (US$ 2.6 billion of the US$ 411 billion) earned from online retail sales. Comparing to sales in developed countries like the United States that its online sales had reached 5% of the total national retail sales, it indicated that Indonesian MSMEs have a big opportunities on online retail sales. Indonesia also has a rapid growth of internet users. By 2015, 36.5% of the population or 93.4 million people will have accessed to the internet and it will rise up to 39.8% or 102.8 million internet users by 2016. Although there were a large number of MSMEs with a great contribution to GDP, a huge potential online market, and the rapid growth of Internet users in Indonesia, a study found that Indonesian MSMEs were still very unsatisfied in using Information Communication Technology (ICT). There were only 0.1% of them were doing business with internet or using Electronic Commerce (e-Commerce) in their business. Therefore, it is important to encourage MSMEs to use e-commerce to support their businesses especially to increase their competitiveness in the era of global markets. Thus, the analysis of the factors that influence the intention of using e-commerce in Indonesian MSMEs was needed. This study identified and predicted the key factors influenced the behavior intention of Indonesian's MSMEs to adopt e-Commerce in their business by using a Modified Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) model. There were 857 valid data out of 1636 data from respondents derived from three highest number of MSMEs among cities in Indonesia which was almost 48.5% of total Indonesian MSMEs. The collected data were analyzed by using Smart PLS 3.0 and the result showed that there were seven factors in Modified UTAUT2 which significantly influence the behavior intention of Indonesian's MSMEs to adopt e-Commerce in their business. The factors were Performance Expectancy (0.310), Content (0.231), Social Influence (0.144), Effort Expectancy (0.085), Trust (0.075), Facilitating Condition (0.074), and Price Value (0.051).