Impact of e-commerce adoption on business performance of SMEs in Uganda: a case study of traders in Makindye division

Abstract

The study was carried out to identify the impact of E-commerce adoption on growth of SMEs in Uganda using the case study of Makindye Division. Emphasis was put on establishing the factors that encourage e-commerce adoption among these enterprises and establishing how these factors have led to growth of SME’s. Information and communication technologies (ICT), particularly e-commerce, are considered very important to the growth and competitiveness of businesses globally. SMEs too need to embrace innovative e-commerce strategies if they are to stay competitive, profitable and successful in local and global markets. Increased use of the Internet offers potential benefits to SMEs, such as cost reduction, improved operational efficiencies, access to new customers and enhanced business growth. However, SMEs, particularly in Uganda, have generally been slow in adopting e-commerce. Empirical research into the challenges faced by SMEs in adopting electronic commerce is also limited in Uganda. A structured, self-administered questionnaire was used to collect data from 142 owners/managers of SMEs in Makindye Division. The results of this study indicate that e-commerce adoption significantly influence the growth of SMEs.