The Diffusion of E-commerce among SMEs: Theoretical Implications and Empirical Evidence

As a specific institution of distributive trades, e-commerce displays similarities with retail stores and mail order companies. As well as providing theoretical support for the assumption that e-commerce is a way to sell certain goods and services at prices potentially lower than those of traditiona...

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Bibliographic Details
Published in:	Small business economics Vol. 21; no. 3; pp. 273 - 283
Main Authors:	Santarelli, Enrico, D'Altri, Samuele
Format:	Journal Article
Language:	English
Published:	Dordrecht Kluwer Academic Publishers 01-11-2003 Springer Nature B.V
Subjects:	19th century Business studies Business to business commerce Commerce Communication Communications technology Consumer goods industries Cost allocation Costs Customer services Customers Distribution channels Economic theory Economics Electronic commerce Enterprises Entrepreneurship Firm theory Internet Leadership Mail order Mail order houses Manufacturing Marketing Retail stores Sales Small and medium sized enterprises Small business Studies Transaction costs Italy
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Summary:	As a specific institution of distributive trades, e-commerce displays similarities with retail stores and mail order companies. As well as providing theoretical support for the assumption that e-commerce is a way to sell certain goods and services at prices potentially lower than those of traditional distributive channels, this paper analyses its inter-firm diffusion among a sample of firms (mostly SMEs) in Italy. The paper has three main purposes. Firstly, it challenges the view of e-commerce as a "technological revolution", by pointing out its nature as a cost-minimizing marketing channel. In particular, it shows how, under certain conditions, ecommerce is a source of transaction cost advantages analogous to those yielded by mail order business. Secondly, the paper identifies from a theoretical viewpoint the circumstances under which e-commerce sales might achieve a significant level of penetration among those SMEs that would otherwise incur high costs in organizing a proprietary distributive channel. Thirdly, it employs a unique data set of Italian manufacturing, service, and hospitality firms (nearly 90% of them with fewer than 100 employees) to estimate a diffusion model based on the logistic curve. According to the estimates, by the fourth quarter of 2003 nearly 50% of the population of firms in the geographical area surveyed will have introduced e-commerce among their marketing channels.
Bibliography:	ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23
ISSN:	0921-898X 1573-0913
DOI:	10.1023/A:1025757601345