SOCIAL COMMERCE AND SME COMPETITIVENESS: ENHANCING FINANCIAL PERFORMANCE IN THE DIGITAL ECONOMY

Abstract

This study examines the role of social commerce in improving the competitiveness and financial performance
of Small and Medium Enterprises (SMEs) in the digital economy. The rapid development of digital technology,
especially social media platforms, is gradually changing the way businesses interact with customers and run
their operations. For SMEs, this shift opens up opportunities to reach a wider market, improve efficiency, and
build closer relationships with customers at relatively low costs. This study uses a qualitative approach based
on a literature review of previous studies related to social commerce adoption, SME competitiveness, and
financial performance. The findings show that the use of social commerce tends to increase product visibility,
encourage customer engagement, and support sales growth. These improvements can contribute to better
financial performance and business sustainability. Additionally, features such as live streaming, user-generated
content, and online reviews have been found to influence consumers' purchasing decisions. However, SMEs
still face several challenges, including limited digital literacy, limited resources, and ongoing platform
algorithm changes. This condition can affect how effectively social commerce is used in practice. Therefore,
it is important for SMEs to continue to adapt and strengthen their digital capabilities to remain competitive. In
conclusion, social commerce plays an important role in supporting the competitiveness of SMEs and financial
performance. With the right strategy and the right use of digital platforms, SMEs can achieve more sustainable
growth in an increasingly competitive environment.