Determinants of E-Commerce Adoption in Vietnamese Small and Medium Sized Enterprises

INTRODUCTION In spite of the fact that the Internet has appeared for some decades, e-commerce becomes very popular only with the support of the World Wide Web (WWW) and its relevant technologies (Napier et al., 2001). In essence, e-commerce can be viewed as a process of purchasing, selling, transferring, or exchanging products, services, and/or information through electronic networks, consisting of the Internet (Turban, Mclean & Wetherbe, 2004). In addition, firms are very likely to utilize the Internet to manage information and integrate e-commerce into their reengineered business processes (Mirchandani & Motwani, 2001). It is obvious that e-commerce is making favorable conditions for economies (especially for developing economies) to implement a shift from the labor intensive paradigm to a knowledge worker paradigm that is strongly expected to be dominant in the future (Mirchandani & Motwani, 2001). Among a variety of benefits reaped by firms, it is contended that e-commerce has been making significant contributions to reduction in costs of doing business, improved product/service quality, new customer and supplier penetration, and generation of new ways or channels for product distribution (Chaudhury & Kuiboer, 2002). Such benefits can be realized in not only large firms but also in SMEs (Huff et al., 2000). There have so far been a number of studies concentrating on aspects of the technology adoption; however, there are few studying the adoption and utilization of e-commerce in SMEs (Grandon & Pearson, 2004; Mirchandani & Motwani, 2001; Riemenschneider, Harrison & Mykytyn, 2003). Nobody can deny the fact that SMEs play an important role in both developed and developing economies. It should be noted that various potential advantages can be created by e-commerce, but surprisingly SMEs' adoption of e-commerce has still been limited perhaps due to the fact that SMEs have different characteristics from large enterprises. Under the opinion of Seyal & Rahman (2003), distinct characteristics imbedded in SMEs consist of small management teams, strong owner influence, lack of staff in specialized areas such as information technology, multi-functional management, limited control over their business environment, limited market share, low employee turnover, a reluctance to take risks, and avoidance of sophisticated software or applications. Such characteristics lead SMEs to be very slow with respect to technology adoption and have more difficulties in taking advantage of benefits from the technologies than large enterprises (Grandon & Pearson, 2004; Poon & Swatman, 1999). Vietnam is still a developing economy; however, it has utilized the Internet since mid1990s. Nowadays with the development of IT (information technology) infrastructure, Vietnam has been becoming a country with its high percentage of the Internet usage in South East Asia. The rapid development of communication and information technologies throughout the world generates motivations for the Vietnamese government to make more informed decisions about IT investments. Since 2000, the government has constructed many programs of information and communication development to facilitate more IT investments in Vietnamese organizations. Such programs are aimed at aiding Vietnamese SMEs to be more aware of IT improvements in general and e-commerce in particular. It is strongly believed that doing business internationally, entering into new markets and customers domestically and internationally, and realizing numerous advantages of utilizing the Internet for all business processes have been making significant contributions to the advent of e-commerce in Vietnam. Furthermore, because of regional strategic importance of Vietnam in South East Asia, utilizing e-commerce is expected to bring about opportunities for Vietnamese SMEs to reap more benefits via the world's business globalization process. Hence, it is very urgent to build a success model for e-commerce adoption consisting of important factors that are very likely to have impacts on Vietnamese SMEs' e-commerce adoption. …