Navigating Digital Transformation: A Qualitative Exploration of SME E-commerce Adoption in Egypt

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The digital transformation of small and medium-sized enterprises (SMEs) is critical for economic development, yet the specific drivers and barriers within emerging markets remain underexplored. Egypt presents a salient context, with a growing digital economy but low SME e-commerce penetration. This study aims to identify and analyse the perceived challenges and opportunities influencing e-commerce adoption decisions among Egyptian SME owners and managers. A qualitative, exploratory design was employed. Data were collected via in-depth, semi-structured interviews with 28 SME decision-makers across multiple sectors in Cairo and Alexandria. Thematic analysis was conducted using NVivo software. A dominant theme was the critical role of informal social networks for overcoming systemic barriers. While 75% of participants cited logistical and payment infrastructure as major hurdles, they leveraged personal connections for reliable delivery and payment collection. Digital literacy, rather than cost, was identified as the primary internal constraint. E-commerce adoption is not a linear, technology-centric process but a socially embedded practice. Success hinges on navigating formal institutional gaps through informal mechanisms, reshaping the perceived risk-reward calculus for owners. Policymakers should design support programmes that formalise and scale existing peer-network solutions. Business associations must develop targeted digital literacy training addressing specific SME operational fears, not just technical skills. E-commerce adoption, digital transformation, SMEs, qualitative research, Egypt, informal institutions This paper provides novel empirical evidence on the mediating role of informal social capital in formal technology adoption, offering a contextualised framework for SME digitalisation in comparable emerging economies.