DIGITAL TRANSFORMATION IN SME’s: THE ROLE OF SOCIAL MEDIA IN ENHANCING ECONOMIC COMPETITIVENESS

Abstract

This paper explores the significant impact of social media on the economic performance of Small and Medium Enterprises (SMEs) in Malaysia, emphasizing its role in enhancing business outcomes. With SMEs constituting a substantial portion of Malaysia's commercial sector, their digital adoption is crucial yet remains underdeveloped compared to larger corporations. Social media integration offers SMEs notable advantages, including improved customer engagement, enhanced financial performance, and increased market share. The study highlights that platform such as Facebook, Instagram, and WhatsApp are pivotal for SMEs to strengthen customer relationships, boost brand visibility, and gain insights into consumer behavior. Additionally, social media adoption positively influences financial performance by enhancing corporate reputation and managing expenditures efficiently, though the impact varies by industry and region. Despite its benefits, successful social media integration requires overcoming challenges related to content creation, strategic alignment, and digital literacy. The findings suggest that SMEs should develop comprehensive social media strategies, invest in digital skills training, and utilize analytics to optimize marketing efforts and expand market presence. This research contributes to understanding social media's role in SME economic development and provides a foundation for future studies on long-term impacts and industry-specific case studies.