E-Commerce Adoption for MSME Performance in Saudi Arabia: Drivers, Outcomes, and Policy Implications

Abstract

COVID-19 turned business upside down for micro, small, and medium-sized enterprises (MSMEs) everywhere, and Saudi Arabia was no exception. Faced with disruption, these businesses scrambled to adapt, trying out new strategies just to stay afloat. In this study, I take a close look at how adopting e-commerce shaped MSME performance during the pandemic, and what drove these businesses to go digital in the first place. The study gathered data from 513 MSMEs across Saudi Arabia’s diverse regions. Using partial least squares-structural equation modelling (PLS-SEM), I examined the links between e-commerce adoption and business outcomes. The findings are clear: technology resources, technical infrastructure, and company size all play a huge role in whether an MSME adopts e-commerce. And when they do make the leap? Their financial and non-financial performance picks up noticeably. Another interesting point—MSMEs themselves serve as a bridge between e-commerce adoption and financial performance, amplifying the benefits of going online. These results add a new layer to what we know about technology adoption. They show how specific factors shape success during a crisis, and just how vital e-commerce can be for both survival and growth. For MSME managers and policymakers, these insights matter. Embracing e-commerce isn’t just a trend; it’s a lifeline for growth and resilience. Policymakers can use this research to design smarter strategies that encourage digital transformation in Saudi Arabia. On a broader level, the study sharpens the Technology-Organization-Environment (TOE) framework, giving MSMEs real-world guidance for navigating digital change, especially in turbulent times.