SMEs Perception in Adopting E-Commerce based on Importance

Performance Analysis: Case Study on Corn SMEs in Banten Province

Indonesia

Agus David Ramdansyah, Lia Uzliawati and Stannia Cahaya Suci

Sultan Ageng Tirtayasa University, Serang, Indonesia

Keywords: E-Commerce, IPA, SMEs, corn, performance.

Abstract: The rapid growth of the internet has offered new marketing strategies. It’s common for companies or

individuals to do business transformation so that they can play optimally in the digital economy, by buying

and selling through the internet called e-commerce. But in Indonesia, especially in the Lebak region, Banten

Province, the ratio of SMEs that have used digital media is still very low. The purpose of this study is to

examine the SMEs' perception in adopting e-commerce based on the Importance Performance Analysis (IPA).

This study uses samples from Corn SMEs in Banten Province, Indonesia. This paper uses purposive sampling

methods. The result of this study shows some indicators that need improvements based on quadrant analysis

are the indicators in the quadrant A (Top Priority), C (Low Priority), and D (Excessive).

1 INTRODUCTION

The use of the digital economy is increasingly

developing, along with the use of information and

communication technology between people. The

global impact of information technology is not only

on the internet but also on the economic field. There

is an interaction between the development of

innovation and technological progress and their

impact on macroeconomics and microeconomics.

The digital economy is the economic sector,

including goods and services, when development,

production, sales or supply depends on digital

technology.

The existence of this digital economy is shown by

the increasingly widespread development of business

or trade transactions that utilize the internet as a

medium of communication and business cooperation

between companies and individuals. It is not

uncommon for companies/individuals to do business

transformation so that they can play optimally in the

arena of the digital economy, one of which is by

buying and selling through the internet called e-

commerce.

Small Medium Enterprises (SMEs) or Usaha

Kecil Menengah (SMEs) have an important role in

the Indonesian economy. The Indonesian economy is

strongly supported by micro and small businesses;

this is seen from the large share of SMEs reaching

around 26.3 million (98.33 %) of the total of 26.7

million businesses. From these businesses, SMEs

have succeeded in absorbing 53.6 million workers

from a total of 70.3 million people (Puslitbang

Ketenagakerjaan Republik Indonesia, 2018).

With a very large number, SMEs are able to

provide a large number of jobs and play a role in

reducing unemployment. Based on the results of

Indonesia’s Economic Census Year 2016, the number

of SMEs dominates economic activity with a

proportion of 98.33% of the total business/company.

SMEs are one of the main components of local

economic development. In conducting its business,

SMEs cannot be separated from the need for

communication, especially internet media.

The Internet is experiencing very rapid

development. With the internet, it is easy and flexible

for us to be able to use computers, laptops, cell

phones, or smartphones. The development of the

internet can be utilized by SMEs to continue to

develop its business. But in Indonesia, the ratio of

SMEs that have used digital media is still very low.

Based on Indonesia’s Economic Census Year 2016,

only 563 thousand or 2.14% of SMEs in Indonesia

have used digital media for their business activities.

Banten Province is one of the newest provinces

established in 2000. The benefits from the internet

Ramdansyah, A., Uzliawati, L. and Suci, S.

SMEs Perception in Adopting E-Commerce based on Importance Performance Analysis: Case Study on Corn SMEs in Banten Province Indonesia.

DOI: 10.5220/0009959301430148

In Proceedings of the International Conference of Business, Economy, Entrepreneurship and Management (ICBEEM 2019), pages 143-148

ISBN: 978-989-758-471-8

143

and the business world are certainly could not be

missed by the cities and regencies in Banten Province

to support the process of business growth in order to

achieve a competitive advantage. The use of the

internet for the business world is most visible in the

product marketing process, for example, is a growing

online business in Indonesia, including in Banten.

However, the use of the internet in small micro-

businesses in Banten is still very small. According to

Indonesia’s Economic Census Year 2016, only

around 37 thousand businesses or 3.84% that use the

internet both for the product marketing process and

others. From the picture below it can be seen that only

about 2.55% of the internet is used for marketing, this

is the basis for this research to conduct training for the

community, especially for SMEs in Banten, how

important it is to "internet literate" and encourage the

use of the internet for marketing even higher. But it is

also possible that the low number of internet users in

trade or economics activity caused by the lack of

information on how to use social media from SME's

user, especially for the olds that can't even use the

smartphone in small villages in Banten Province.

Figure 1 Distribution of Businesses / Companies by Internet

Use in Banten Province in 2016 (%)

Source: BPS 2016

Corn is the second-largest harvest food besides

rice. The development of corn in Banten Province is

carried out in order to meet the needs of food as well

as feed so as to increase farmers' incomes. Maize

productivity in Banten only reaches 2-3 t/ha dry

shelled (BPS Banten, 2011). In Banten Province,

there is an animal feed factory that requires 122 tons

of corn per month. But the request cannot be fulfilled

by farmers.

The use of the internet is as high as it is today, it

is very important for businesses to use the internet as

a promotional medium to increase their income,

especially for SMEs in Lebak Banten that sell corn

product. However, the lack of use of the internet of

these SMEs raises a question for an analysis of the

study of the quality of social media services, whether

websites related to agriculture, especially corn, are in

line with user expectations or not. Importance

Performance Analysis (IPA) is a method that

discusses the comparison of the performance of the

service quality of a system that is felt at this time with

expectations (importance) so that it can be made a

priority recommendation for improvement by the

company based on the results of the analysis on the

IPA diagram. There is a lot of research that used

Importance Performance Analysis (IPA) from the

buyers' or consumer's perspectives. Chang (2017)

found that user perception of in mobile tourism

marketing, important susceptibility is higher than

satisfaction; ease of use is the most important; real-

time and correct information is important, but not in

good satisfactory, should be in the most need to

improve. Shia (2016) et al. found that indicators that

need more attention include providing believable

information, timely information, relevant

information, etc. The differences of this study are

analyzing the user/SME's perspective in terms of e-

commerce use.

2 RESEARCH METHODS

This research uses descriptive analysis with

quantitative methods. The sampling technique is

purposive sampling, wherein this study not carried

out by consensus but in a focused manner that

considers certain criteria made against the object in

accordance with the research objectives. The

respondents in this study are SMEs’ in Banten

Province in the field of corn. This study uses 40

respondents from corn SME's in Lebak, one of the

regions in Banten Province.

The data collection was carried out using a

questionnaire. After the data was collected, the data

was tested using the product-moment validity test and

Cronbach alpha reliability test to prove whether the

data obtained is truly reliable and valid so that it can

be proven correct.

Furthermore, the data that has passed the test is

then processed using the method, which is

Importance Performance Analysis (IPA), to analyze

whether the website has matched its performance

with user expectations. After that, the conclusion is

drawn based on the formulation of the existing

problem.

2.55

1.28

96.17

ForMarketing

Others

NotUsethe

Internet

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Cartesian diagram quadrant analysis is used to

identify what attributes need to get improvements for

performance. The following is an explanation of each

quadrant, as in Figure 2.

Information:

- Quadrant I: The main priority is high importance but

low performance. In this quadrant shows the factors

or attributes that are considered affect the user, but

expectations do not match customer desires so that

they are not satisfied.

- Quadrant II: Maintain performance i.e., high-

performance scores and high expectations. This

quadrant is considered good and needed, so it must

be maintained.

Figure 2. The Original IPA framework

Source: Martilla and James (1977) in Chang (2017)

Information:

- Quadrant III: Low priority, low-performance value,

and low importance. This quadrant shows the

factors that are a less important influence on users;

its existence is average and is considered less

important and less satisfying.

- Quadrant IV: Excessive, i.e., high-performance

value and low importance. In this quadrant, the

performance has been rated very well, but its

presence is considered not important by the user, so

that its existence is often ignored.

3 RESULT AND DISCUSSION

3.1 The Profile of Respondents

The number of respondents, as many as 40 people,

consisted of men and women. The characteristics of

respondents in this study by gender are presented in

the figure below. Based on Figure 3, the respondents

in this study, around 70% were men, amounting to 28

people, while female respondents were 12 people or

30%.

Figure 3. The respondents’ profile based on gender.

Source: This study results (2019)

While from Figure 4, it can be seen that the

respondents of the age under 29th are five people or

12.5% of the total respondents. Ages 30th-39th are

about 18 people with a percentage of 45%. There are

14 people aged 40th-49th, with a percentage of 35%

of the number of respondents and three people above

the 50

Figure 4. The respondents' profiles based on age.

Source: This study results (2019)

3.2 Importance Performance Analysis’

Mapping (IPA)

The results of the validity test show all items of the

variables tested invalid conditions (>0.226). This

means that all data are valid and can be continued for

the next test, which is the reliability test. The results

32.5%

67.5%

Female Male

12.5%

45%

35%

7.5%

<29 30‐29 40‐49 <50

High Importance

Low

Performance

High

Performance

Quadrant II

Keep Up the

Good Work

Low Importance

Quadrant I

Concentrate

Here

Quadrant III

Low Priority

Quadrant IV

Possible

Overkill

SMEs Perception in Adopting E-Commerce based on Importance Performance Analysis: Case Study on Corn SMEs in Banten Province

Indonesia

145

of the reliability test that all variables greater that

Cronbach's Alpha is meaning that all the variables are

reliable, so the analyzed data can be trusted and

consistent can be used for subsequent testing.

The Importance Performance Analysis (IPA),

based on the questionnaire answers given by the

respondent, produces the data/ information. This

information has been averaged based on the variables

used.

Table 1. The average number of Expectations and Performance

Respondents Expectations. Performance GAP

1 4.34 4.17 -0.17

2 4.41 4.07 -0.34

3 4.32 4.10 -0.22

4 4.20 3.98 -0.22

5 4.22 4.02 -0.20

6 4.24 4.02 -0.22

7 4.22 4.07 -0.15

8 4.20 3.98 -0.22

9 4.15 3.93 -0.22

10 4.17 3.80 -0.37

11 4.22 3.80 -0.41

12 4.10 3.95 -0.15

13 4.10 3.98 -0.12

14 4.12 3.80 -0.32

15 4.05 3.95 -0.10

16 4.02 3.95 -0.07

17 3.98 3.95 -0.02

18 4.02 4.05 0.02

19 4.05 4.12 0.07

20 4.07 4.10 0.03

Average 4.16 3.99 -0.17

Source: This study results (2019)

From the mapping results, it is known that the

average total for performance/ quality compared to

the average expectation is smaller (3.99 for

performance <4.16 for expectation), meaning that

there is still a gap between quality and expectation

with a large mean gap value of 0.17, it can be

interpreted that the performance is still far from the

user's expectations and still need improvement to

achieve the expectations desired by the user. To find

out the priority of existing items, and Importance

Performance Analysis (IPA) analysis is then

performed.

This research uses Importance Performance

Analysis (IPA) to see the perception of corn

entrepreneurs in adopting e-commerce. Cartesian

quadrant analysis is used to identify what attributes

need to be improved for performance. From the

results of the calculation of expectations and

performance obtained an average of the calculation

results illustrated by the IPA diagram, as shown in

Figure 5.

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Figure 5. Importance Performance Analysis’ Mapping

(IPA) (Cartesian Quadrant Diagram

Figure 5 shows numbers 1 to 20; this shows the

questions or indicators on the questionnaire that have

been distributed to 40 respondents as follows:

1. Is the e-commerce that you use easy to

operate?

2. While interacting with e-commerce, do you

feel the application is clear and easy to

understand?

3. Is the e-commerce that you use easy to use?

4. Does the e-commerce that you use have an

attractive appearance?

5. Does the online/ website application design

match the type of application? (e-commerce)

6. Does e-commerce express the value of

competence? (Competent to be a selling

platform)

7. Does e-commerce provide a positive

experience for you?

8. Does e-commerce provide accurate

information?

9. Does e-commerce provide reliable

information?

10. Does e-commerce provide timely

information? (Information is always updated)

11. Does e-commerce provide relevant

information?

12. Does e-commerce provide information that is

easy to understand?

13. Does e-commerce provide complete and

detailed information?

14. Does e-commerce provide information in the

right format? (data information that states the

date or time or lists currency values)

15. Does e-commerce have a good reputation?

16. Do you feel safe to conduct transactions on e-

commerce/ online applications/ websites?

17. Do you feel safe about the personal information

stored in an online application or website/ e-

commerce?

18. Does the e-commerce/ online

application/website provide personalized

facilities for users?

19. Does the online / website application provide

communication facilities between community

members?

20. Do you feel confident that online/ website

application services are running well and

optimally?

3.3 Discussions

1. Quadrant A (Top Priority)

Indicators in quadrant A are the top priority for

improvement because quadrant A has important or

expected factors for users, but the performance of

online applications that are still felt as low does not

satisfy the user. Therefore the online application

provider used by corn businesses to market their

products or carry out buying and selling transactions

needs to allocate the resources that are sufficient to

improve the performance that already exists. The

indicators included in quadrant A are as follows.

a. Indicator number 11, e-commerce provides

relevant information.

b. Indicator number 10, e-commerce provides timely

information.

c. Indicator number 4, e-commerce has an attractive

appearance.

d. Indicator number 8, e-commerce provides

accurate information.

2. Quadrant B (Maintain Performance)

The indicators in quadrant B are conditions that must

be maintained because the indicators in quadrant B

are the pending factor that is expected by the user to

be in accordance with existing performance. The

indicators located in quadrant B, namely.

a. Indicator number 1, the e-commerce used is easy

to operate

b. Indicator number 2, when interacting with e-

commerce, the application is clear and easy to

understand

c. Indicator number 3, the e-commerce used, is easy

to use.

Performance

Expectations

A B

SMEs Perception in Adopting E-Commerce based on Importance Performance Analysis: Case Study on Corn SMEs in Banten Province

Indonesia

147

d. Indicator number 5, the online/ website

application design, matches the type of

application

e. Indicator number 6, e-commerce conveys the value

of competence. Competent to be a selling

platform.

f. Indicator number 7, e-commerce provides a

positive experience.

3. Quadrant C (Low Priority)

The indicators in Quadrant C are considered low by

the user, but their expectations or interests are not

considered important by the user, so they are not a top

priority for the application provider in improvement.

The indicators that are located in quadrant C are:

a. Indicator number 9, e-commerce provides reliable

information

b. Indicator number 12, e-commerce provides

information that is easy to understand.

c. Indicator number 13, e-commerce provides

complete and detailed information.

d. Indicator number 14, e-commerce provides

information in the right format.

e. Indicator number 15, e-commerce has a good

reputation.

f. Indicator number 16, the user feels safe to do

transactions on e-commerce/ online applications/

websites.

g. Indicator number 17, the user feels safe about the

personal information stored in an online

application or website/ e-commerce.

4. Quadrant D (Excessive)

The indicator in this quadrant is the performance of

the website, which is considered very good, but its

importance is considered low by the user, so it is often

ignored. The indicators that are located in quadrant D

are:

a. Indicator number 20, the user feels confident that

the online/ website application services are

running well and optimally.

b. Indicator number 18, e-commerce/ online

applications/ websites provide personalized

facilities for users

c. Indicator number 19, online/ website application,

provides communication facilities between

community members.

4 CONCLUSION

Recommendations for improvement that can be given

based on the results of the IPA quadrant analysis are

the indicators in quadrant A, C, and D. In order of

priority, the improvement of quadrant A is the main

priority, because the indicators in this quadrant have

less performance while their importance is considered

very important by the user

Quadrant C, which is a low priority, because the

quality of website performance is still considered less

by users, but its importance is considered less

important. Quadrant D, the indicators considered

excessive, because the performance of the website is

considered to be very good, but its importance is

considered low by the user so that its existence is

often ignored. In quadrant D, it is recommended by

the manager to allocate the available resources in this

indicator to other indicators that still need to improve

performance in order to create efficiency.

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