The Role of Digital Technology in Improving the Competitiveness of MSMEs in Indonesia: A Review of Online Marketing

Abstract

Introduction:
This study explores the role of digital technology in enhancing the competitiveness of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia, particularly through the adoption of online marketing strategies. In the digital era, MSMEs face both opportunities and challenges in transforming their marketing practices to reach wider markets and improve performance.
Objectives:
The primary objective of this research is to analyze the influence of digital marketing strategies on MSME competitiveness. Specifically, it investigates the key success factors, barriers, and enabling conditions for the adoption of online platforms such as social media and e-commerce by MSMEs.
Methods:
Using a qualitative approach, this study employs literature review, analysis of previous research, and selected case studies of Indonesian MSMEs. Data were interpreted thematically to understand the interplay between digital marketing implementation and MSME performance outcomes.
Results:
Findings reveal that digital marketing significantly contributes to increased sales, customer engagement, and market expansion for MSMEs. Social media and online platforms serve as effective tools for building customer relationships. However, limited digital skills, lack of access to training, and heightened online competition remain critical challenges. The ability of MSME owners to interact directly and responsively with customers is a key advantage in maintaining loyalty and satisfaction.
Conclusions:
Digital marketing strategies not only foster MSME growth but also shift their market orientation from local to national and even global scales. To maximize these benefits, targeted interventions—especially in digital capacity-building—are needed. The study suggests that digital transformation initiatives must be inclusive and tailored to the unique constraints faced by MSMEs.