E-commerce of Peruvian SMEs: Determinants of internet sales before and during COVID-19

Abstract

The COVID-19 pandemic accelerated the adoption of e-commerce among Peruvian small and medium enterprises (SMEs), prompting a sudden shift from traditional physical marketplaces to online sales. Before the pandemic, many businesses were beginning to adopt ICTs but only 8.1 % were selling their products and services online. The study aims to analyze the determinants of online sales in Peruvian SMEs in 2019, and the factors that contributed to the rise in online sales during the first year of the COVID-19 pandemic. The Peruvian National Enterprise Survey 2019 was used to evaluate the e-commerce adoption behavior of SMEs during 2019 and 2020. To analyze the determinants and factors, Heckman two step model was employed. The findings revealed that digital readiness was crucial for adopting online sales, but not significant for scaling sales during the pandemic; the rise in sales during the social lock-down period necessitated the implementation of a unique product delivery approach many times using own vehicle and bearing in mind informal competition. In essence, digital readiness played a critical role in enabling Peruvian SMEs to adopt online sales, but its impact was limited when it came to scaling sales during the pandemic. This research contributes to the existing literature by highlighting the unique challenges and opportunities faced by SMEs in a developing economy during a global crisis. The implication of this study highlights the need for CEOs at SMEs to prioritize digital readiness, as well as rebuild from the economic impacts of any crisis.

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