Digital Leap or Digital Lag? How COVID-19 Reshaped Microenterprise Adoption in Malaysia’s Retail Sector

Digital Leap or Digital Lag? How COVID-19 Reshaped Microenterprise Adoption in Malaysia’s Retail Sector

Sofian Shamsuddin¹ , Herwina Rosnan^2*, Siti Qausar Mohd Shuraddin³

^1,2Arshad Ayub Graduate Business School, University Technology MARA, 40450 Shah Alam, Malaysia

³Eco World Development Group Berhad

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.905000436

Received: 14 May 2025; Accepted: 17 May 2025; Published: 20 June 2025

ABSTRACT

The COVID-19 pandemic disrupted traditional retail operations, forcing micro-enterprises to adopt digital tools for survival. While existing literature examines digital transformation in small and medium enterprises (SMEs), microenterprises (businesses with fewer than 10 employees) face unique challenges due to limited resources, technological literacy, and infrastructural constraints. This study investigates the digital adoption patterns of micro-retailers during the pandemic, focusing on the drivers, barriers, and sustainability of such transitions. Through content analysis of the secondary data, this paper investigates how micro-retailers leveraged low-cost digital solutions (e.g., WhatsApp Commerce, mobile payments) and assesses whether these changes were sustained post-pandemic. Findings reveal that while crisis-driven adoption was widespread, long-term digital integration remains inconsistent due to resource constraints, trust, lack of digital culture training, and cultural resistance. The paper contributes to policy discussions on supporting micro-enterprises in digital economies.

Keywords: Digital Adoption, Retail Industry, Microenterprises, Malaysia

INTRODUCTION

Microenterprises are generally defined as businesses that operate on a small scale, typically characterized by their limited number of employees and modest levels of revenue and capital. The specific criteria for what constitute a microenterprise can vary by context. However, they are often delineated by the number of employees, generally considered to be fewer than ten workers (Alva, 2019). Furthermore, microenterprises are frequently part of the informal sector, where they may not be registered or regulated like larger enterprises, reflecting their unique position within the economic landscape (Chew et al., 2010). In Malaysia, a business is categorized as a microenterprise when the sales turnover is less than RM300,000 or less than five full-time employees (SME Corp Official Website).

In the context of Malaysia, microenterprises play a significant role in the economy, contributing to employment and local economic activities (Alves & Carvalho, 2022). The owner-manager, who is often directly involved in all aspects of the business operations, significantly influences the microenterprise’s strategic decisions and overall performance (Alves & Carvalho, 2022). While microenterprises are frequently seen as engines of growth, they face distinctive challenges due to their size, including limited access to capital, insufficient technical skills, and vulnerability to market fluctuations (Ahamad et al., 2020; Paredes-Torres et al., 2022). This emphasizes the need for policy frameworks and financial support tailored to the specific needs of microenterprises, which can facilitate their growth and resilience in an increasingly competitive market environment.

The digitalization of retail microenterprises in Malaysia offers both significant opportunities and substantial challenges. As small-scale businesses that typically operate with limited resources, these microenterprises play a crucial role in the Malaysian economy, providing employment and contributing to local communities through services and products that satisfy everyday consumer needs (Fazal et al., 2021). However, the ongoing digital transformation presents obstacles that microenterprises must navigate to remain competitive in a rapidly evolving marketplace.

The COVID-19 pandemic has intensified the urgency for retail microenterprises to embrace digital solutions. Many of these enterprises were caught unprepared, lacking the necessary tools and digital literacy to pivot to online operations effectively (Räisänen & Tuovinen, 2021). Studies indicate that microenterprises often struggle with limited access to technology, financial constraints, and insufficient training in digital skills, resulting in a notable lag in adopting innovative practices compared to larger businesses (Räisänen & Tuovinen, 2021). Furthermore, a persistent cultural resistance to change hampers the integration of digital technologies, as many microentrepreneurs are accustomed to traditional business methods and might view digitalization as a daunting shift (Fazal et al., 2021).

Accordingly, the COVID-19 pandemic accelerated digital transformation across industries, with retail micro-enterprises experiencing unprecedented pressure to adapt. Unlike larger firms, micro-retailers—often family-owned or informal businesses—faced acute challenges due to their reliance on foot traffic, cash transactions, and minimal technological infrastructure (World Bank, 2021). Government lockdowns and social distancing measures forced these businesses to adopt digital tools rapidly, yet the sustainability of such adoption remains underexplored.

Bank Negara Malaysia (2023) reported that Malaysia’s retail sector, contributing 15.2% to GDP. The sector experienced unprecedented digital shifts during COVID-19. The government’s RM300 million Shop Malaysia Online (SMO) initiative and ePenjana cash incentives propelled 73% of micro-retailers to embrace digital tools (MDEC, 2021). However, post-pandemic data indicates uneven sustainability, particularly among traditional businesses like:

• Mamak stalls (only 28% retained QR code payments)
• Night market (pasar malam) vendors (12% continued online sales)
• Chinese medicine shops (41% using WhatsApp orders)

The literature on digital adoption in retail microenterprises reveals a multifaceted landscape of challenges, motivations, and contextual factors influencing their technological integration. This review synthesizes relevant findings from recent studies to provide an understanding of digital adoption’s role in enhancing competitiveness and operational efficiency among microenterprises in the retail sector. Specifically, this study addresses three gaps in the literature:

1. Micro-enterprise focus: Prior research emphasizes SMEs, neglecting the distinct challenges of micro-retailers (e.g., limited capital, informal operations).
2. Post-pandemic sustainability: Most studies analyze emergency adoption (2020–2021) but not long-term retention of digital practices.
3. Regional specificity: Perspectives from developing economies (e.g., Southeast Asia, Africa) are scarce compared to Western contexts.

LITERATURE REVIEW

A. Technology-Organization-Environment (TOE) Framework

The Technology-Organization-Environment (TOE) framework (Tornatzky & Fleischer, 1990). Is a theoretical model that examines how businesses adopt new technologies by analyzing three key dimensions: technological factors (such as available innovations and their compatibility with existing systems), organizational factors (including firm size, resources, and management support), and environmental factors (like market competition, regulatory policies, and industry trends). This framework suggests that successful technology implementation depends on the interplay between these internal and external contexts, helping explain why some organizations embrace digital transformation more readily than others. The TOE model provides a structured approach to understanding technology adoption in diverse business settings by considering technological feasibility, organizational readiness, and environmental pressures.

Most past research explores the theoretical frameworks influencing digital adoption, with studies highlighting the Technology-Organization-Environment (TOE) framework as a significant lens for understanding the dynamics within retail supply chains (Daniels & Jokonya, 2020). This framework indicates that technological advancements, organizational capabilities, and environmental pressures are crucial in determining how microenterprises adopt digital technologies for enhanced supply chain operations. Specifically, factors such as external pressures and normative influences, as observed in the adoption of social media (Osakwe & Ikhide, 2022), showcase that microenterprises are often driven to adopt digital technologies not solely by internal capabilities but also by the broader institutional contexts.

Factors Influencing Digital Adoption

Technological Factors:

• Cost and Compatibility: The cost of digital technologies and their compatibility with existing systems are crucial determinants. Microenterprises are more likely to adopt digital solutions if they perceive them as cost-effective and compatible with their current operations (Bhattacharjee, 2024).
• Perceived Ease of Use and Usefulness: The ease with which digital technologies can be used and their perceived benefits significantly impact the intention to adopt these technologies (Bhattacharjee, 2024).

Organizational Factors:

• Firm Size and Age: Digital adoption tends to increase as firms mature in terms of age and size. Younger and smaller firms often face more challenges in adopting digital technologies (Verma et al., 2024).
• Management and Culture: Effective change management, organizational culture, and strategic alignment are critical for successful digital adoption (Porfírio et al., 2020).

Environmental Factors:

• Business Environment and Infrastructure: The quality of connectivity infrastructure and the broader business environment play a significant role in digital adoption. Better infrastructure and a supportive business environment facilitate higher adoption rates (Affandi et al., 2024).

B. Digital Adoption in Micro-Enterprises in the Retail Industry

Digital adoption in micro-enterprises (MMEs) within the retail industry is influenced by several factors and has significant implications for business performance. Studies found that digital adoption is positively correlated with sales growth and productivity. Firms adopting digital technologies tend to experience higher sales growth and improved productivity compared to non-digital firms (Verma et al., 2024; Adhikary et al., 2021). Digital payment technologies, in particular, have been shown to enhance economic performance, with a notable increase in revenue for MMEs that adopt these technologies (Adhikary et al., 2021). Adopting digital technologies such as cloud computing and AI can improve operational efficiency, inventory management, and overall business continuity. These technologies help MMEs manage resources more effectively and respond quickly to market changes (Liew et al., 2023).

Moreover, trust and external knowledge sources have emerged as pivotal in the digital marketing landscape of microenterprises. Research indicates that trust in digital marketing professionals and engagement with external knowledge sources significantly impact the adoption of digital marketing strategies (Buvár & Gáti, 2023). Given this, microenterprises can benefit from leveraging networks and external expertise to enhance their marketing strategies, thereby improving brand visibility and consumer engagement.

However, numerous barriers hinder the effective adoption of digital technologies in microenterprises. Many microretailers report moderate levels of digital transformation, with significant challenges including financial constraints, resistance to changing traditional business practices, and skills gaps (Agustin et al., 2024). Such findings underscore that microenterprises often lack the resources and know-how to effectively integrate digital technologies into their operations (Marnewick, 2014); (Osman et al., 2019). For instance, the struggle to access and utilize ICT tools is particularly pronounced among microenterprises in developing countries, where inadequate infrastructure and limited digital skills present formidable obstacles (Osman et al., 2019).

Furthermore, the COVID-19 pandemic catalyzed a shift toward digital solutions among microenterprises, revealing differing levels of adaptability based on prior experience with digital tools (Räisänen & Tuovinen, 2021). While some micro retailers embraced digital innovations to navigate the crisis, others remained hesitant, evidencing a divergence in their ability to leverage technological advancements in times of disruption. This adaptive capacity is critical, as those who effectively integrate digital solutions tend to achieve better market performance and customer engagement (Ram et al., 2023).

C. The Impact of COVID-19 on Digital Adoption in Retail Micro-Enterprises

Pre-COVID-19: Traditional Cash-Based Transactions

Before the pandemic, micro-retailers, particularly small, often informal businesses such as street vendors, neighborhood shops, and market stalls, heavily relied on face-to-face transactions and cash payments. This preference stemmed from deep-rooted trust in cash as a tangible and immediate form of payment, particularly in regions with limited banking infrastructure (Olanrewaju et al., 2020). Many small merchants avoided digital transactions due to concerns over fraud, transaction fees, or a lack of familiarity with digital tools.

Interestingly, some micro-retailers in developing economies “leapfrogged” traditional digital payment systems, bypassing credit card terminals and physical point-of-sale (POS) machines entirely. Instead, they adopted mobile money platforms like Kenya’s M-Pesa, which allowed even small vendors to accept digital payments without expensive hardware (Suri & Jack, 2016). This phenomenon demonstrated that, in some cases, mobile technology could accelerate digital adoption where traditional banking systems had failed to penetrate.

Barriers to Digital Adoption Before the Pandemic

Despite the potential benefits of digital tools, most micro-retailers were slow to adopt them due to several key challenges:

1. Cost Barriers – Implementing e-commerce platforms, digital payment systems, or even basic inventory management software required significant upfront investment—a major hurdle for small businesses with razor-thin profit margins (Craig & Van der Sijde, 2022). Many lacked the capital to purchase hardware (like card readers) or pay for subscription-based digital services.
2. Trust Issues – Cash remained king due to skepticism toward digital payments. Some retailers feared fraud, hidden fees, or the unreliability of internet connectivity, while customers in certain regions preferred cash for its anonymity and immediacy (Suri & Jack, 2016).
3. Informality of Business Operations – Many micro-retailers operated without formal business registration, making it difficult to access financial services, including digital payment solutions that required bank accounts or tax identification (Giones et al., 2020). This informality locked them out of fintech innovations that could have streamlined their operations.

Pandemic-Driven Digitization: A Forced Transformation

The COVID-19 crisis acted as an unexpected catalyst for digital adoption, pushing even the most cash-reliant micro-retailers to embrace technology for survival. Key changes included:

1. Social Commerce Boom – With physical stores closed or restricted, many small retailers turned to WhatsApp, Facebook Marketplace, and Instagram Shops to sell goods (Zhang et al., 2021). These platforms provided low-cost, accessible ways to reach customers without needing a formal e-commerce website.
2. Shift to Contactless Payments – Health concerns over cash handling accelerated the adoption of mobile wallets and QR code payments, reducing physical contact while speeding up transactions. In some cases, governments and fintech companies promoted these solutions to minimize virus transmission.
3. Hybrid Business Models – To comply with lockdowns, micro-retailers adopted curbside pickup and delivery via SMS or voice calls (OECD, 2022). This low-tech but effective approach allowed businesses to continue operating without sophisticated logistics systems.

Ongoing Challenges in Digital Adoption

Despite rapid digitization, micro-retailers still faced obstacles:

• Resource Constraints – Many still struggle with the expense of digital tools, particularly subscription fees for e-commerce platforms or transaction costs for mobile payments. Limited financial and human resources can be significant barriers to digital adoption for MMEs (Liew et al. (2023).
• Trust Gaps – Some customers and merchants remained hesitant about digital payments, preferring cash for its familiarity.
• Lack of Digital Culture and Training – Many microenterprises struggle with a lack of digital culture and insufficient training, which hinders the adoption of digital technologies (Lopes et al., 2023).
• Policy Gaps – A lack of supportive regulations, digital literacy programs, and financial incentives hindered broader adoption (OECD, 2021).

The pandemic forced micro-retailers to digitize at an unprecedented pace, proving that even the smallest businesses could adapt when necessary. While challenges remain, the crisis demonstrated the potential for mobile money, social commerce, and hybrid models to sustain micro-enterprises in a post-pandemic economy. Future growth will depend on addressing cost barriers, building trust in digital payments, and creating policies that support informal retailers in their digital transition.

METHODOLOGY

This study examines secondary data from prior research to investigate the phenomenon of digital adoption among microenterprises in Malaysia’s retail industry. Given the increasing importance of digitalization in sustaining small businesses, this research reviews and analyzes findings from existing literature to identify persistent challenges and emerging trends. By employing content analysis techniques, the study critically evaluates key themes, including barriers to digital integration, resource constraints, and the varying levels of technological readiness among microenterprises. The synthesis of current past research not only highlights recurring obstacles, such as limited financial capital, lack of digital skills, and infrastructural gaps, but also underscores the potential benefits of digital tools in enhancing operational efficiency, customer engagement, and market competitiveness.

A thorough review of the literature is particularly valuable in unpacking complex, multifaceted issues like digital transformation, where economic, social, and technological factors intersect. This approach allows for a nuanced understanding of how retail microenterprises navigate digital adoption within Malaysia’s broader business ecosystem. Furthermore, the study explores how external factors, such as government policies, industry competition, and consumer behavior shape the digitalization process. By consolidating insights from diverse studies, this paper contributes to a more comprehensive framework for analyzing digital adoption challenges and opportunities in the retail microenterprise sector.

DISCUSSION ON DIGITAL ADOPTION IN RETAIL MICROENTERPRISES IN MALAYSIA

The adoption of digital technologies in retail microenterprises is now a vital focus of both research and practice, especially in light of Malaysia’s distinctive socio-economic environment. Existing literature identifies multiple factors that affect digital transformation in this field, such as economic conditions, entrepreneurial skills, policy frameworks, and socio-cultural influences. This literature review brings together significant studies to offer a thorough understanding of the drivers, challenges, and effects linked to digital adoption in Malaysia’s microenterprises.

A foundational framework for understanding digital adoption in retail microenterprises is the Technology-Organization-Environment (TOE) framework. Research indicates that microenterprises in Malaysia face several challenges when adopting technological innovations associated with Retail 4.0, such as limited financial resources and inadequate technological infrastructure (Sakrabani & Ping, 2020). Sakrabani and Ping emphasize that proactive strategies, including government financial incentives and tailored support, are vital for overcoming these challenges and achieving full digitalization within the retail industry. Such external support mechanisms have been emphasized in various studies as essential for promoting technology adoption in resource-constrained microenterprises (Fazal et al., 2021).

Moreover, entrepreneurial competencies play a significant role in impacting the performance and sustainability of microenterprises. Studies have illustrated that competencies such as opportunity recognition and organizational skills significantly enhance the competitiveness of microenterprises, enabling them to navigate the complexities associated with digital transformation (Fazal et al., 2021; Zainol & Mamun, 2018). For instance, Zainol and Mamun underscore the importance of developing entrepreneurial competencies among women micro-entrepreneurs in Kelantan, Malaysia, as a pathway to achieving competitive advantages and improved business performance (Zainol & Mamun, 2018).

However, several obstacles impede the effective adoption of digital technologies among Malaysian microenterprises. Research shows that many micro-entrepreneurs struggle with a lack of capital, inadequate digital skills, and limited understanding of e-commerce platforms (Agustin et al., 2024). Furthermore, the COVID-19 pandemic has intensified these challenges but also revealed opportunities for digital transformation. Wan et al. found that microenterprises that transitioned to online platforms during the pandemic reported varying levels of readiness and success, highlighting the dynamic nature of digital adaptation in crises (Wan et al., 2023). The pandemic not only disrupted traditional business models but spurred many microenterprises to reconsider their operational frameworks and invest in digital solutions for survival and growth (Zainol et al., 2018).

Additionally, the cultural context plays a critical role in shaping the perceptions and attitudes toward technology adoption. Social dynamics, familial support systems, and community norms can influence an entrepreneur’s willingness to embrace digital tools (Zainol & Mamun, 2018; Hashim et al., 2021). For instance, the flexibility in microcredit systems has illustrated that access to finance can enhance operational capacities and encourage digital adoption among women entrepreneurs (Mamun, 2016). This cultural framing is necessary as it emphasizes the collective aspects of entrepreneurship that go beyond the individual entrepreneur to include support networks and community resources.

The importance of digital payment systems has also emerged as a crucial factor in the successful transition to e-commerce among microenterprises in Malaysia. Research comparing e-payment adoption in Malaysia and Indonesia found that awareness and infrastructural capabilities were significant determinants of effective digital payment integration, which in turn influences overall business performance (Trianto et al., 2023). This finding aligns with the broader trend that highlights the critical role of financial technology in enhancing competence and operational efficiency among microenterprises (Trianto et al., 2023).

Moreover, the integration of microfinance in supporting digital adoption brings another dimension to this discussion. Studies have revealed that microcredit initiatives can bolster the financial stability of microenterprises, facilitating access to technological tools that might otherwise be unattainable (Nor & Rosli, 2021; Nor et al., 2021). By providing targeted support and resources, microfinance institutions can significantly alter the landscape of digital readiness, preparing microenterprises to adopt new technologies effectively.

In light of these insights, a holistic approach is required for fostering digital adoption in Malaysian retail microenterprises. Government initiatives must focus on creating an enabling environment that promotes both financial and non-financial resources, including training programs and infrastructural development (Ahamat, 2019). Policies aimed at enhancing the digital capabilities of microenterprises must prioritize the unique needs of this sector, ensuring that interventions are tailored and relevant.

In conclusion, the literature illustrates a complex interplay of factors influencing digital adoption among retail microenterprises in Malaysia. While there are notable challenges, strategic interventions, entrepreneurial competencies, and supportive cultural dynamics can collectively enhance digital integration and sustainability in this sector.

Addressing The Challenge in Digital Adoption

To ensure the viability and sustainability of retail microenterprises in Malaysia, it is imperative to comprehensively prioritize solutions that address these challenges. Strategies such as improving access to affordable financing for digital tools, developing robust training programs tailored to the needs of microentrepreneurs, and fostering a supportive ecosystem for innovation are essential. Furthermore, enhancing the distribution of digital infrastructure and addressing socio-cultural factors that influence technology acceptance can facilitate a smoother transition toward digital operational frameworks (Bawamohiddin et al., 2024).

Addressing the challenges of digitalization for retail microenterprises in Malaysia involves a multi-faceted approach informed by the existing literature. Retail microenterprises face various barriers, including limited financial resources, inadequate digital skills, infrastructural limitations, and a culture that may resist embracing change. Each of these barriers can be effectively addressed through coordinated efforts from stakeholders, including the government, educational institutions, and the private sector.

1. Financial Support and Incentives

Limited financial resources are among the most significant barriers to digitalization in microenterprises. Many microbusinesses lack access to funding required for technological investments, which stifles their growth and digital adoption (Chen, 2022). To tackle this challenge, government programs should be designed to provide targeted financial support, such as low-interest loans and grants intended explicitly for digital upgrades. Moreover, microfinance institutions could develop flexible loan products that allow microentrepreneurs to invest in essential digital tools without substantial long-term debt burdens. The design of financial instruments should be sensitive to the risk profiles of microenterprises, ensuring that they are accessible and affordable (Ngo et al., 2022).

2. Skill Development and Training

The lack of digital skills among microentrepreneurs represents another critical drawback affecting digital adoption. Many individuals in these businesses may not possess the necessary knowledge to effectively utilize digital tools or understand e-commerce platforms (Räisänen & Tuovinen, 2021). A robust framework for skills development is essential. Partnerships between local governments, NGOs, and educational institutions could facilitate training programs focused on digital literacy and e-commerce skills tailored to microentrepreneurs. Additionally, leveraging online learning platforms and mobile applications to deliver training can increase access to educational resources even in rural areas, thus enhancing the overall digital competency of the workforce (Liao, 2024).

3. Infrastructure Development

Infrastructure limitations, particularly in rural areas, hinder microenterprises from accessing reliable digital services (Räisänen & Tuovinen, 2021). To foster digitalization, investments should be made in improving connectivity, especially broadband access, which is crucial for e-commerce operations. Public-private partnerships (PPPs) can play a vital role in augmenting infrastructure development by pooling resources for enhanced connectivity solutions that cater to underserved areas. In this context, governments might consider subsidizing the installation of broadband in areas where microenterprises predominantly operate, enabling businesses to integrate digital tools effectively (Ngo et al., 2022).

4. Cultural Transformation and Change Management

Resistance to adopting new technologies often emerges from established cultural practices and a lack of understanding of the benefits of digitalization. To surmount this barrier, there needs to be a concerted effort to change mindsets around technology adoption (Bollweg et al., 2021). Awareness campaigns showcasing the success stories of local microenterprises that have effectively utilized digital solutions can motivate others. Moreover, community workshops and dialogues can foster an environment of support and shared learning, leading to a more favorable attitude towards embracing change within local business ecosystems (Räisänen & Tuovinen, 2021).

5. Ecosystem Building and Collaborative Networks

Establishing networks connecting retail microenterprises with larger players can facilitate knowledge sharing and resource access. Engaging industry leaders to provide mentorship and guidance to microbusinesses can help enhance their capabilities (Hänninen et al., 2017). Some successful models have emerged from larger firms that share their digital transformation strategies and resources, thereby leveling the playing field for microenterprises. This collaborative ecosystem allows for collective problem-solving and innovation, enhancing Malaysian microenterprises’ overall competitiveness and adaptability (Pan et al., 2022).

CONCLUSION AND IMPLICATION

This synthesis of current insights highlights the pressing need for a coordinated approach that incorporates governmental support, educational initiatives, and community engagement to aid microenterprises in their digital journey. By recognizing the critical barriers and opportunities associated with digitalization, stakeholders can better equip retail microenterprises in Malaysia to navigate the challenges of an increasingly digital economy, thereby fostering resilience and competitiveness in this vital sector.

Digital adoption in microenterprises within the retail industry is driven by a combination of technological, organizational, and environmental factors. While there are challenges, the benefits in terms of sales growth, productivity, customer engagement, and operational efficiency make digital adoption a critical strategy for MMEs aiming to thrive in the digital era. Digital adoption in micro-enterprises within Malaysia’s retail industry is influenced by a combination of environmental pressures, technological readiness, and managerial perceptions. Despite the challenges, there are significant opportunities for growth through e-commerce and digital marketing, supported by government initiatives. Addressing the knowledge gap and providing strategic support can enhance the digital transformation of these enterprises, fostering their competitiveness and resilience in the digital economy.

In addressing the challenges of digitalization for retail microenterprises in Malaysia necessitates a comprehensive approach involving financial support, skill development, infrastructure improvement, cultural transformation, and the establishment of collaborative networks. Policymakers and stakeholders must work together to create a conducive environment that supports digital adoption, thereby enabling microenterprises to thrive in an increasingly digital economy. The collaboration between policymakers and business leaders should focus on creating supportive environments and providing the necessary resources and training to facilitate this transition.

The findings of this literature review hold significant implications for policymakers, industry stakeholders, and business support organizations. Evidence-based recommendations can inform targeted interventions, such as tailored training programs, financial incentives, and improved digital infrastructure to facilitate smoother digital transitions for microenterprises. Ultimately, fostering digital transformation in this segment of the economy can enhance resilience, drive innovation, and ensure long-term sustainability in an increasingly digital marketplace.

Notwithstanding, the definition of microenterprises encompasses not only their operational scale but also their potential for innovation, job creation, and contribution to economic vitality, particularly in developing regions. This situation invites continuous discourse on how best to support and integrate microenterprises into broader economic strategies for sustainable development.

In brevity, while the opportunities for digital adoption in retail microenterprises are vast, they are met with significant challenges that require targeted strategies for overcoming barriers. The existing literature provides a comprehensive overview of the factors affecting digital adoption, from theoretical frameworks to practical implications, thereby highlighting the need for supportive measures and resources to facilitate successful digital transformation.

Future research should continue to explore the evolving landscape of digital technologies within microenterprises, particularly in the context of dynamic economic conditions and global market trends.

ACKNOWLEDGEMENT

The authors would like to thank Arshad Ayub Graduate Business School for the financial support provided through the AAGBS Internal Grant No. 600-RMC/DANA 5/3/AAGBS (006/2022) in producing this paper.

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