Social Commerce and SME Competitiveness in the Fashion Industry: Insights from an Emerging Market

This paper examines how small and medium-sized enterprises (SMEs) in an emerging market context convert social commerce engagement into competitive performance. While social commerce is often framed as a democratizing force that lowers market entry barriers for small businesses, its actual impact on business competitiveness remains uneven. Using empirical data from 201 SME owners actively operating on TikTok Shop and Instagram Shop, this study investigates the role of internal structural readiness, specifically transactive memory systems, task specialization, and coordination in shaping performance outcomes. Partial Least Squares Structural Equation Modelling (PLS-SEM) was employed to analyze the relationship between digital engagement and competitive advantage. The results show that social commerce investment alone does not significantly enhance market penetration or sales performance unless supported by internal mechanisms that allow SMEs to manage digital complexity collectively. These findings shift the conversation from adoption-centric models toward organizational capacity and knowledge integration as key enablers of digital competitiveness. By extending the Resource-Advantage Theory of Competition, this study highlights how internal knowledge structures and team adaptability determine the extent to which digital resources can be transformed into market value. The paper contributes to the growing literature on digital transformation among SMEs by offering a structural perspective on performance readiness in the social commerce domain. It also offers managerial implications for SMEs seeking to strengthen internal capabilities, as well as for platform providers and policymakers aiming to build more inclusive digital ecosystems in emerging economies. In doing so, this research addresses both theoretical and practical gaps in understanding the micro-foundations of SME competitiveness in knowledge-driven digital markets.