Increasingly firms are looking to use social media to connect with different stakeholders as plans on building presence on such platforms are becoming part of top-level strategy. The purpose of this study is to identify the factors that would help the Small and Medium Enterprises (SMEs) of India to adopt Social Media Marketing (SMM) mechanisms for improving their business impact. Adoption of SMM by SMEs has considerable impact on the improvement of business outcome of the SMEs. A theoretical model has been developed with the help of theory borrowed from TAM and UTAUT2 with some modifications to explore this impact through business performance, sales, connect with customers, identify customer' needs and creativity of the employees. The theoretical model has been validated empirically using a survey of 310 firms and subsequent analysis have been carried out using structured equation modelling. The results highlight that perceived usefulness, perceived ease of use and compatibility positively affect impact of SMM after adoption by the SMEs. The facilitating conditions have insignificant impact whereas cost has a significant but negative impact on the use of SMM by SMEs. Since there are a few studies in this context, the study contributes to existing literature on the impact of SMM in SMEs in an emerging economy.
In India, Small and Medium Enterprises SMEs are those enterprises where investments in machinery or equipment and in plant lie between INR 25 Lakhs ∼USD 35000 to INR 10 Crores ∼USD 1.4 million concerning to manufacturing industries. For SMEs, concerning to service sector the investments lie between INR 10 Lakhs ∼USD 14000 to INR 5 Crores ∼USD 0.7 million. These limits are in conformity with Micro, Small & Medium Enterprises Development Act, 2006; notified in Sept 2006. The role of these SMEs in India is vital so far as social and economic developments of India are concerned. These enterprises have effective contribution towards export activities, towards employment generation and in productive growth Junaidah, 2007) SMEs effectively contribute to improve nation’s economic health. It enriches inventions as well as innovation (Massey et al., 2004; Stieglitz, Mirbabaie, Ross, & Neuberger, 2019). SMEs have ample opportunities to employment generation at a low cost and as such SMEs in India may be considered to have emerged as a vibrant and dynamic sector of economic growth (Das, 2007; Srinivasan, Rutz, & Pauwels, 2015; Ng, Kee, & Ramayah, 2019; Adla, Gallego-Roquelaure, & Calamel, 2019). In India, 95 % enterprises are categorized as SMEs and in manufacturing sector, they are adding 40 % value (Singh, Garg, & Deshmukh, 2010). The characteristics of SMEs are highly heterogeneous with high flexibility along with appreciable innovative entrepreneurial spirit. SMEs have variety of sizes having different technological levels with varied characteristics of services and products. As a result, it helps to spread industrialization in backward and rural areas, reducing regional imbalances. This helps to provide equitable and fair distribution of wealth and national income. Study reveals that during 2016, SMEs in India have contribution of 40 % towards total exports, 45 % on manufacturing output, contributing 8% of GDP (Srinivasan et al., 2015). Thus, improvement of the health of SMEs would bring in economic growth of the country. However, ironically, in India SMEs have low technological competence with limited resources. As such, to improve the growth of SMEs in all sectors like effectiveness, efficiency, competitive advantage; applications of modern Information and Communication Technology (ICT) are considered necessary (Consoli, 2012; Ongori & Migiro, 2010). ICT has many and varied applications (Alam & Noor, 2009). Among these, social media is considered as one of the important ingredients of ICT that has appreciable impact on business. In this perspective, it is necessary to investigate if the use of social media can help the SMEs of India towards their overall growth.