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.