What makes SMEs successful in cross-border e-commerce? A multi-national study.Project
Domestic business-to-consumer (B2C) electronic commerce (e-commerce) markets in countries such as the UK, Germany, and the Netherlands are nearing saturation, which makes expansion across national borders for electronic retailers (e-retailers) an increasingly important strategic choice for revenue growth. In cross-border e-commerce, e-retailers aim to extend their economic activities beyond national borders as this offers access to a broader customer base on a larger scale than in the domestic market. Still, small and medium-sized enterprises (SMEs) are struggling with their international expansion via the Internet.
Previous studies in the field of firm internationalisation have demonstrated how strategic orientations influence the decision of firms to enter foreign markets and subsequently affect their business performance in foreign markets. Even though strategic orientations and how they affect business performance has been investigated in the field of international e-commerce, these studies only included large companies, leaving a lot of questions unanswered about what influences the success of SMEs in cross-border e-retailing. SMEs face different challenges in cross-border e-retailing than large companies.
Unlike large companies, SMEs are closely controlled and managed by the owner of the firm, who performs the principal decision making, resulting in a strong influence of the firm owner on the strategic orientations of the SME. Not only age and work experience of the owner (i.e. sociodemographic characteristics) might influence the success of SMEs, but also the firm owner’s motivations and personal goals in life (i.e., human values) seem to call for attention when the goal is to explain the successful internationalisation of SMEs. Next to characteristics of the firm and its owner, also country characteristics (e.g. cultural and economic characteristics) may have an influence on the success of SMEs.
This study investigates how both country characteristics and firm owner characteristics influence the success of SMEs in cross-border e-retailing. Through conducting a multi-national study in 31 European countries, this study builds theory on the decision of SMEs to start cross-border e-retailing and on their subsequent business performance. This project is among the first to set up such a large-scale study on SMEs in cross-border e-retailing.