How Can Digital Competencies Transform The Performance Of Micro Business

Digital transformation is becoming crucial for business sustainability. The research investigates how digital literacy can enhance business performance through improved marketing linking capabilities in micro businesses, focusing on a sample of food and beverage businesses in Surabaya. This paper contributes to the limited research on how digital literacy directly influences business performance in micro businesses, particularly in the food and beverage sector. Previous studies have explored general digital adoption, but this paper provides a more detailed exploration of how specific practices shape marketing effectiveness and, in turn, business outcomes. The study employs a quantitative research method using survey data collected from 103 micro business owners in Surabaya. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that digital literacy practices have a significant positive impact on business performance both directly and through marketing linking capabilities. Empirical findings indicate that micro businesses with higher digital literacy are better equipped to manage customer relationships, improve marketing strategies, and enhance overall performance. The study concludes that digital literacy practices are critical for micro businesses in boosting their marketing linking capabilities and business performance. The implications suggest that micro businesses should focus on improving their digital competencies to stay competitive in a rapidly digitalizing market. The main takeaway is that investing in digital literacy not only enhances operational efficiency but also drives better business outcomes through effective marketing.