The Challenges of E-Commerce Implementation for Saudi SMEs: Case Study of Retail Sector in Riyadh

Abstract

With the rapid growth of information globalization, e-commerce has been increasingly popular in the last decade. For developing countries, e-commerce plays an instrumental role in gaining more benefit from trade. Therefore, e-commerce would help developing economies to obtain a solid foothold in the multilateral trading system. The service of e-commerce also would enhance the effectiveness and efficiency in the business domain and enables cost-reduction measures on commercial expenditure. This research focuses on the e-commerce adoption for small and medium-sized enterprises (SMEs) in Saudi Arabia. The objective of this study is to identify realistic challenges and barriers of implementing e-commerce in Saudi Arabia. The collection of primary data was from 153 SMEs of retail sector in Riyadh, based on purposive sampling technique. Secondary data from previous academic studies was deployed for this research as well. After the analysis of received data, six key barriers of e-commerce implementation for Saudi SMEs were identified: Cost of Launching an E-commerce Venture; Cultural Influences; Lack of Professionals; Incomplete Logistics Distribution Systems; Imperfect Information and Communication Technology; Fear of Risk Taking and Failure. This is 26.14%, 24.84%, 16.34%, 13.73%, 12.42% and 6.53% of the research sample respectively.

Keywords: e-commerce, small and medium-sized enterprises, Saudi Arabia, challenges and barriers