Selective Digital Adaptation and Business Resilience: A Longitudinal Study of Apparel SMEs in China

The purpose of this study is to examine how apparel SMEs in less-developed regions of China adapt to long-term retail digitalization and how these adaptations relate to business resilience and the creation of consumer and community value. This two-and-a-half-year longitudinal qualitative study (February 2023–June 2025) combined repeated prospective observations with retrospective accounts from later-added firms through interviews and field visits with apparel businesses and consumers. By 2025, the participating businesses had been in operation for an average of 25 years. Data were analyzed using grounded-theory coding, with themes organized using the Gioia data structure. Findings show that, as digital technologies increasingly reshaped retailing, brick-and-mortar SMEs became proactive in selectively adopting accessible technologies, including social media for marketing and consumer interaction and digital payment systems for transaction management. This differed from their earlier response to e-commerce, which had transformed retailing since the 2000s but was initially met with passive adaptation because of resource and knowledge constraints. SMEs also adjusted product assortments and targeted niche consumer segments, gradually forming hybrid physical–digital business models. Participants retrospectively reported more stable customer and revenue trajectories after 2017, although adaptation did not guarantee survival. SMEs retained physical-retail strengths, including personalized service, trust-based relationships, and tangible product evaluation. This study shows how selective digital adaptation and market repositioning may support resilience among resource-constrained SMEs.