Does the adoption of social media platforms enhance the performance of Indonesian MSEs?

Purpose This study aims to identify the determinants of social media adoption (SMA) by micro and small enterprises (MSEs) in Indonesia, and the influence of such platform adoption on their performance. The study offers valuable insights for education, the formulation of public policies related to digital infrastructure, and the shaping of public perceptions of digital engagement in business. These implications align with the research findings, which connect theoretical concepts with practical applications and contribute to enhancing economic development and improving the quality of life. Design/methodology/approach The study data were gathered through a survey, with questionnaires distributed to MSEs in Indonesia. A total of 217 respondents participated. The analysis was conducted using the structural equation modeling (SEM) technique, with the assistance of SmartPLS software. Findings The empirical evidence indicates that the adoption of social media applications (SMA) contributes to the performance of MSEs. Given the rapid advancement of digital technologies, MSEs are increasingly required to integrate social media platforms into their business models to remain responsive to market demands and competitive industry pressures. The findings further demonstrate that performance expectancy, effort expectancy, social influence, and hedonic motivation significantly influence SMA adoption. Conversely, price value, habitual usage, and facilitating conditions do not exhibit a statistically significant effect on the decision to adopt such platforms. Moreover, the analysis reveals that the level of industry competition does not moderate the relationship between SMA adoption and MSE performance, suggesting that firm performance benefits derived from social media integration remain relatively stable regardless of competitive intensity. Research limitations/implications Despite its contributions, this study has several limitations. First, the use of a post hoc survey involving a single respondent may have introduced systematic bias and common method variance (CMV). Second, the study focuses on micro and small businesses, with approximately 80% of respondents representing firms with fewer than five employees, and approximately 55% and 18% representing the food and beverages and fashion and accessories sectors, respectively. This sectoral concentration may limit the generalizability of the findings; therefore, future studies could examine a more diverse range of sectors, including printing, clinics and travel services (Tatik and Setiawan, 2025). Finally, the study focuses primarily on economic and marketing metrics and does not incorporate environmental or social dimensions. Practical implications The findings suggest that social media offers MSEs a relatively low-cost capability to reach customers, strengthen networks and respond to changing market conditions. Managers should therefore view SMA not merely as a communication tool, but as a strategic capability that can support performance. In particular, managers should strengthen performance expectancy, effort expectancy and social influence by demonstrating the business benefits of social media, improving users' confidence and ease of use, and leveraging customer and business networks to encourage adoption. Since competitive intensity does not significantly alter the SMA–performance relationship, managers should focus less on competitive pressure and more on how effectively social media can be integrated into marketing, customer engagement and market-development activities. Social implications This study aims to support micro and small enterprise actors in Indonesia in enhancing their quality of life. By fostering business growth and improving performance that ensures long-term sustainability, these enterprises are expected to make a meaningful contribution to social welfare and the overall economic development of Indonesia. Originality/value The research makes a meaningful and novel contribution to the literature by exploring how SMA affects the performance of MSEs in Indonesia. It offers fresh perspectives on the adoption and effects of social media platforms within the Indonesian setting, where internet and social media usage are widespread.