More Than a Strategy: Leveraging Social Media for SMEs’ Performance

Abstract

Aims: This study examines the effect of social media usage on the performance of SME. Social media usage is conceptualized as an ordered construct: marketing, relationship service, information service, cost effectiveness, and compatibility. Study design: A quantitative study. Place and Duration of Study: SME’s owner and manager in Malang, Indonesia. Methodology: A quantitative study with SEM-PLS. The two-stage approach was used in assessing the higher-order construct of social media usage and its influence on SMEs’ performance. Social media usage consist of 5 indicators: marketing, relation services, information search, cost effectiveness and compatibility. Total respondents is 230 SMEs in East Java, Indonesia. Results: The results highlight that social media is not only a communication tool but also a strategic resource that enhances both financial and non-financial aspects of SME performance. Conclusion: This study contributes to how the digital is understood in SMEs. By providing a complex perspective on various ways social media can be utilized in business operations. It gives practical guidance for SME managers and policymakers on how to leverage social media as a driver of business performance.