View of The Effect of Business Environment on The Performance of SMIs in The Food and Beverage Sector through Marketplace Adoption as A Mediating Variable

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The Effect of Business Environment on The Performance of SMIs in The Food and Beverage Sector through Marketplace Adoption as A Mediating

Variable

Yusti Mauriska Choirunnisa^1*, Djoko Koestiono², Fitria Dina Riana², Abdul Wahib Muhaimin², Dwi Retno Andriani²

1Postgraduate of Agribusiness, Faculty of Agriculture, Brawijaya University, Veteran St. Malang, 65145, Indonesia

2Department Socio-economic, Faculty of Agriculture, Brawijaya University, Veteran St. Malang, 65145, Indonesia

Received: 28 December 2022; Revised: 4 April 2023; Accepted: 21 June 2023

ABSTRACT

This research was conducted at SMIs which was seen from its growth that SMIs had the opportunity to develop in this city. This study aims to describe and analyze the effect of entrepreneurial orientation and the role of government through marketplace adoption on company performance. This study used nonprobability sampling with a purposive sampling technique to the owners/managers of companies totaling 50 respondents. This research method is SEM-PLS (Structural Equation Model - Partial Least Square) and uses Warp PLS 7.0 software. The results of the study show that: (1) Marketplace adoption has a positive effect on the SMI performance; (2) Entrepreneurial orientation has a positive and significant effect on marketplace adoption and SMI performance; (3) Role of government has a positive and highly significant effect on marketplace adoption and SMI performance; (4) Adoption of marketplace has a positive and highly significant effect on SMI performance; (5) For the indirect effect, entrepreneurial orientation to company performance through marketplace adoption has a significant positive effect and role of government to company performance through marketplace adoption has a significant positive effect.

Keywords: entrepreneurial orientation; role of government; marketplace adoption; company performance;

SEM-PLS; small and medium industries; business environment How to cite:

Choirunnisa, Y. M., Koestiono, D., Riana, F. D., Muhaimin, A. W., & Andriani, D. R. (2023). The Effect of Business Environment on The Performance of SMIs in The Food and Beverage Sector through Marketplace Adoption as A Mediating Variable. HABITAT, 34(2), 154–166.

https://doi.org/10.21776/ub.habitat.2023.034.2.14 1. Introduction

The development of digital technology has been very rapid, especially since the Covid-19 pandemic which has been going on for almost three years in Indonesia. The transmission of the corona virus is very fast that caused limit community activities policy, pandemic not only affects the health aspect but also the economic aspect. One of the affected is the Small and Medium Industries (SMIs). SMI is a sector that dominates the domestic industry and even plays a role as a supporter of the national economy

(Ministy of Industry, 2019b). It has been proven that 60 percent of the total industrial workers in Indonesia are dominated by the SMI sector (Ministy of Industry, 2019a). However, the pandemic resulted in a decrease of physical interaction, people's direct purchasing power, demand and supply, so that SMI turnover decreases. The Indonesian economy contracted by 2.07 percent in 2020.

The era of revolution 4.0 digital technology is a solution in developing the business sector towards a new digital economy era because most consumers born over 1990 have a high intensity towards the internet (Sirclo, 2020). Based on Ministry of Communication and Informatics data, with the emergence of a pandemic, e-commerce players experienced 91%

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*Corresponding Author.

E-mail: [email protected]

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growth (Ministry of Communication and Infromatics, 2020). Of course, this has increasingly tightened competition for SMIs actors who are starting to enter the e-commerce, in addition to changes in consumer spending behavior. One of the e-commerce models that has the potential to improve SMI performance is the marketplace. In 2021, data from the Central Statistics Agency records that the food and beverage business is the type of goods that are most sold with a percentage of 41.5% of the total business (BPS, 2022).

The culinary business has opportunities in these conditions because people still need food under any circumstances. It is practical, time- saving and even cost effective (use some promos). Marketplace adoption provides many benefits for companies such as increasing company productivity, performance, and growth (Hanafiah et al., 2021). But behind the existing opportunities, it takes time and effort to understand e-business and internet connections that differ in each region. The government must support technological progress with programs that encourage businesses to adopt technology to make business more effective and efficient. The inhibiting factors for the development of SMIs are limited capital, business management, marketing, technology quality, human resources, training, innovation, business standards and legality. Therefore, SMI must be able to apply this entrepreneurial innovative, proactive in recognizing opportunities and threats and daring to take risks so that the company can continue to operate and superior in competing with competitors (Norris F. Krueger, 2000).

The food and beverage sector have the potential to develop because it is on the main route connecting East Java which has the potential to accelerate industrialization.

Evidenced by the growth in units which increase every year and has an economic rate with the highest contribution of 7.24 (BPS Kota Kediri, 2021). Even though many new SMIs have sprung up, the GRDP growth rate has decreased by 17.51 percent because the performance of SMIs is not optimal (BPS Kota Kediri, 2020). The company's expertise in applying entrepreneurial orientation in a competitiveness strategy will produce superior performance (Li et al., 2009).

The development of SMIs can be realized with government support according to Government Regulation Number 29 of 2018 as a facilitator, regulator, and catalyst. Based on the explanation

above, company performance is the result of a representation of entrepreneurial orientation and role of government through marketplace adoption. The sophistication of customers using the internet is the right reason for SMI to adopt the marketplace and it is hoped that SMI can upgrade.

2. Theoretical Underpinning

Small and Medium Industry is important for equitable distribution of income in an area.

Many industrial units exist especially in the food and beverage sector. Significant growth in SMI units occurs every year. This shows that there is potential and opportunity for the development of SMIs. However, the impact of the pandemic has become an obstacle for SMIs to operate, plus other problems that are often experienced by SMIs. Several obstacles for food and beverage SMIs to be promoted are not having extensive knowledge about business and how to develop it, not using digital marketing to increase sales, not doing branding, not having a budget plan, not having complete financial reports, and not meeting standards. and business legality.

Impeded business operations reduce the performance of a company. Company performance plays a role in the sustainability of a business. Entrepreneurial orientation reflects the company's innovative, proactive, risk-taking, autonomy, and competitive aggressiveness to outperform competitors. Several studies prove that entrepreneurs who have entrepreneurial behavior have better performance (Wiklund &

Shepherd, 2005). Basco et al., (2020), Kraus et al., (2012), and Shehu & Mahmood (2014) states a significant positive relationship between entrepreneurial orientation and company performance. Desmaryani (2017), Ibrahim &

Mustapha (2019) in his research said that the government also played a role as a trigger for improving the performance of SMI. As well as research on the use of marketplace adoption can expedite the operations of a business (Abebe, 2014; Farida et al., 2017) which marketing innovations like this are very useful during the Covid-19 pandemic era.

The success of linking entrepreneurial orientation to company performance depends on external factors. The implementation of the industrialization strategy will move effectively if the government uses the functions of communication, information, and technology

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optimally. The presence of digitization makes it easier for SMIs to obtain information at a lower cost and a wider market. This opportunity should be utilized in the new digital economy era.

Therefore, researchers want to analyze the business environment on the performance of SMIs.

3. Research Method

The study utilized a quantitative approach.

It follows the study's objective to analysis the effect of the business environment on Small and Medium Industry Performance. The research was performed on October 2022. The choice of location was based on the significant growth of SMIs, especially in the field of food and beverage providers, but the use of the marketplace was not optimal and evenly distributed. The population used is owners or managers who have adopted the marketplace for at least 6 months in the food and beverage provider business.

The researcher herself formulated the criteria and determined the eligibility of the respondents as a sample (nonprobability sampling) using a purposive sampling technique which is based on the objectives and limitations of the research. This purposive sampling technique was chosen based on certain considerations to obtain a sample with the desired characteristics. The minimum determination of the sample size can state that the SEM-PLS statistical method has proper statistical results.

The research sample uses the rule of thumb as in the study (Solimun et al., 2017) where the number of samples is calculated from the number of structural paths multiplied by ten. Then the number of samples obtained is 50 originating from 5 structural paths multiplied by 10.

Several technical data analyzes carried out in this study are as follows:

3.1. Validity and Reliability Tests

Several ways to test the reliability of the questionnaire with Warp PLS 6.0 according to Solimun et al. (2017) are as follows:

1. Composite reliability (ρc) ≥ 0.7 2. Alpha Cronbach > 0.6

3.2. Descriptive Statistical Analysis

The analysis aims to answer the first study's objective. The quantitative data analysis was performed by a frequency distribution table.

The frequency distribution functions to discover

the score distribution of respondent answers and calculate the mean and standard deviation

3.3. Test Paired Two Sample for Means T test - Paired Two Sample for Means Test or comparative test is used to test the first hypothesis. This test compares the difference in means of the two paired groups. If the mean value after treatment > the mean before treatment, it means that there has been an increase. Furthermore, the two-tailed P(T<=t) value <0.05 can be interpreted as significantly positive. This measurement was carried out for SMIs that previously only carried out offline marketing for at least 6 months.

3.4. Inferential Statistical Analysis

The study data were analysed using Partial Least Square (PLS). The following steps were taken from Solimun et al. (2017) concerning the structural equation modelling with Warp PLS 7.0: Design an inner and outer model then create a path diagram, transformed in to an equation and parameter estimation, check convergent and discriminant validity, review the value of R- Squared and Q-Squared, then conduct hypothesis testing.

4. Results and Discussion 4.1. Respondent Characteristics

Data recapitulation of owners or managers of Small and Medium Industries is shown in the table of the characteristics of the respondents as follows:

Table 1. Respondent Characteristics

Characteristics Categories Percentages

Gender Female 64%

Male 36%

Age 20 - 29 56%

30 - 39 38%

40 – 49 6%

Education High School Graduates

28%

Diploma 16%

Bachelor (S1) 56%

Duration of Marketplace Adoption

7 – 12

months

14%

13 – 18 months

14%

19 – 24 months

34%

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Characteristics Categories Percentages

> 25 months 38%

Industrial Sector

Food 84%

Beverage 16%

Industrial Classification

Small Medium

82%

18%

Based on table 1, it is known that the characteristics of the respondents are dominated by the age range of 20-29 years by 56%. Candra

& Suryadi (2020) said that the millennial generation aged 24-39 years has high intelligence and digital adaptation. Changes in consumer behavior occurred during the Covid-19 pandemic from direct purchases to indirect ones (Mega farisha et al., 2022). The transition of business operations to the digital world is not a problem for the millennial generation. Creative culinary delights are in great demand by the millennial generation because they have a high curiosity and try to fulfill their desire to shop for a product. So that with attractive products and digital marketing it is hoped that it can optimize the performance of SMI.

Women represent creative culinary business ownership in this study. As mentioned Tambunan (2017), Indonesian women tend to work in the food and beverage, service and trade sectors. Currently in Indonesia, there are not a few women who start businesses to ease the family's economy and are happy to become entrepreneurs. Women play an active role in the nation's economy. The success of women in entrepreneurship is due to their excellence, namely thorough, diligent, tenacious, patient, strong determination, highly dedicated and disciplined in financial management. With these advantages the process of understanding and pursuing business through digital marketing will go well.

The education level of the respondents with the largest percentage is S1 graduates. This fact dispels the perception of low education for SMI entrepreneurs. Highly educated women have self-confidence that triggers the creation of innovative entrepreneurship (Babalola, 2009).

Open-mindedness is usually owned by individuals who are highly educated and consider technology not a threat. Higher education affects a person's ability to think, analyze, level of creativity, adapt and manage a project (Álvarez- Huerta et al., 2021). So, they are aware that the use of technology such as the marketplace can support the progress of SMI.

The average SMI that has adopted the marketplace is more than 25 months. The longer you apply marketing through the marketplace, the more you will feel the benefits of your business.

Because we know that the marketplace is a solution in the process of selling, marketing, and buying. Simply post product photos along with descriptions, contact link features, an analysis of the quality of advertisements. Feedback capabilities from consumers can also be obtained when using the marketplace and can save time and costs for product marketing. The use of the marketplace can expand market reach, not only offline.

The industrial sector is dominated by SMI in the food sector by 84%. While the rest, namely SMI in the beverage sector, amounted to 16%.

The food and beverage industry is one of the mainstay manufacturing sectors in making a major contribution to national economic growth.

In addition, the national food and beverage industry is increasingly competitive because there are quite several them. This includes not only large-scale companies, but also small and medium-sized industries (SMI). Most SMIs in this study are SMIs with the type of processed chip products. Starting from tempeh chips, macaroni chips, tofu chips, bitter melon chips, cassava chips, mushroom chips, banana chips, and so on.

The industrial sector is dominated by small industrial scale SMI by 82%. Meanwhile, the remaining 18% are medium-sized industrial scale SMI. Determination of scale based on Regulation of the Minister of Industry of the Republic of Indonesia Number 64/M-IND/PER/7//2016 concerning Amount of Workforce and Investment Value for Industrial Business Classification.

4.2. Descriptive Analysis Result

Descriptive analysis was carried out by knowing the frequency distribution of respondents' answers and the average of each variable to describe the data obtained.

Table 2. Statistic Descriptive Analysis

Variable Min Max Mean Std.

Deviation Entrepreneurial

Orientation (X1)

1 5 3,942 0,857

Role of Government

(X2)

1 5 4,085 0,817

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Variable Min Max Mean Std.

Deviation Marketplace

Adoption (Y1)

2 5 4,145 0,719

Company Performance

(Z1)

2 5 4,17 0,811

This mean value is included in the high category when adjusted for Solimun et al. (2017) category because the value of mean > 3,5. All variables are free from outliers because all have a standard deviation > mean. So, the mean value and standard deviation are fulfilled.

4.3. Outer Model Evaluation a. Convergent Validity Test

Convergent validity testing is the first stage to find out whether the variables used in the research are valid or not. This evaluation can be seen by examining the loading factor value above 0.7 and if the value is below 0.4 then the indicator must be removed and AVE with criteria

≥ 0.50 (Joseph F Hair et al., 2017). Convergent validity testing in this study is divided into two, namely the 1st order condition and the 2nd order condition. It is known that all loading factor values ≥ 0.70. These results indicate that all fulfill the standard stipulation of the loading factor value, so that the indicator is declared valid. Based on the AVE value, all reflective constructs can explain more than half of the variant indicators because the AVE value in the study is greater than its determination (≥ 0.50), so that it fulfills the requirements of convergent validity.

b. Discriminant Validity Test

Discriminant validity in the study was fulfilled, the 1st order condition and the 2nd order condition. The loading value > cross loading and the AVE root value is greater than the correlation coefficient in the same row between constructs and other constructs, so the questionnaire is valid (Solimun et al., 2017) c. Reliability Test

Reliability is a measure of the ability of a questionnaire to measure variables consistently.

Analysis of the reliability of the questionnaire can use two methods, namely measured by the reliability of the composite and Cronbach's Alpha results. For the results of both the 1st order condition and the 2nd order condition, it is known that the composite reliability value ≥ 0.7 and the value of Cronbach's Alpha α ≥ 0.60.

Table 3. Composite Reliability Value and Cronbach's Alpha 1st Order Condition Dimension Composite

Reliability

Cronbach'

s Alpha Information

EO1 0.893 0.759 Reliable

EO3 1,000 1,000 Reliable

EO5 1,000 1,000 Reliable

GOV1 0.896 0.769 Reliable

GOV2 1,000 1,000 Reliable

GOV3 1,000 1,000 Reliable

MA1 0.837 0.611 Reliable

MA2 1,000 1,000 Reliable

MA3 0.837 0.611 Reliable

Table 4. Composite Reliability Value and Cronbach's Alpha 2nd Order Condition Value

Standard EO (X1) GOV (X2) MA (Y1) P(Z1)

Composite Reliability ≥ 0.70 0.917 0.870 0.900 0.906

Cronbach's Alpha ≥ 0.60 0.886 0.774 0.867 0.792

Information Reliable Reliable Reliable Reliable Reliable 4.4. Inner Model Evaluation

a. Path Coefficient Evaluation

Testing the model using the path coefficient shows the direction of the relationship between entrepreneurial orientation, role of government, marketplace adoption and SMI’s performance. Based on figure 1, all variables

have a path coefficient value that is near to +1 (indicating the direction of a positive relationship). It can be seen from the five directions of the relationship, namely EO to MA, EO to P, GOV to MA, GOV to P and MA to P showing positive and significant results.

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Figure 1. Path Coefficient Value in Structural Model

b. R-Squared Evaluation

R-Squared or the coefficient of determination is used to measure the percentage of endogenous constructs (criterion) that can be explained by exogenous constructs (predictors).

According to Hair, the higher the R-Squared value, the better the model shown.

Table 5. R-Squared and Q-Squared values Response

Variable

R-squared value

Q-Squared value

MA 0.466 0.467

P 0.704 0.690

Based on table 5, it is shown that the diversity of performance variables can be explained by marketplace adoption of 70.4%

while the remaining 29.6% is influenced by other variables not included in this model and so on.

c. Q-Squared Evaluation

Q-Squared used for assessing the predictive validity of a set of exogenous latent variables (predictors) on endogenous latent variables (criterion). According to exposure Sholihin & Ratmono (2013), if Q-Squared is more than zero (Q2 > 0) then a model has good predictive validity. Based on table 5, Q-Squared (Q2) is 0.467 for marketplace adoption and 0.690 for SMI performance. So, it can be concluded that the marketplace adoption model and SMI performance are stated to have good predictive power.

d. Goodness of Fit (GoF) Evaluation

Goodness of Fit (GoF) is useful for validating the structural model. GoF evaluation is also used to measure the quality of a model with 10 sizes of model fit (Solimun et al., 2017). The standard values of the ten Goodness of Fit (GoF) have been presented in the following table 6.

Table 6. Goodness of Fit (GoF) Value No Model Fit and Quality

Indices Fit Criteria Results Information

1 Average Path Coefficient

(APC) P-value < Alpha (5%) 0.343;

P=0.002 Fulfilled 2 Average R-Squared (ARS) P-value < Alpha (5%) 0.585;

P<0.001 Fulfilled 3 Average Adjusted R-Squared

(AARS) P-value < Alpha (5%) 0.564;

P<0.001 Fulfilled 4 Average Block VIF (AVIF) Acceptable if ≤ 5, ideally ≤

3,3 1,865 Fulfilled

5 Average Full Collinearity VIF (AFVIF)

Acceptable if ≤ 5, ideally ≤

3,3 2,297 Fulfilled

6 Tenenhaus GoF (GoF) Small ≥ 0.1, medium ≥

0.25, large ≥ 0.36 0.641 Large

7 Sympson's Paradox Ratio (SPR)

Acceptable if ≥ 0.7, ideally

= 1 1,000 Fulfilled

8 R-Squared Contribution Ratio (RSCR)

Acceptable if ≥ 0.9, ideally

= 1 1,000 Fulfilled

9 Statistical Suppression Ratio

(SSR) Acceptable if ≥ 0.7 1,000 Fulfilled

10 Nonlinear Bivariate Causality

Direction Rati o(NLBCDR) Acceptable if ≥ 0.7 1,000 Fulfilled Based on the fulfillment of the 10 GoF

index measures that have been described previously, it can be concluded that the overall

research model is feasible and has a good model fit.

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4.5. Discussion

a. SMI Operational Performance Before and After Adopting Marketplace

Initially, SMI carried out offline marketing, such as participating in bazaars, supplying products to store, consumers could also buy directly at store, distributing flyers, and putting up banners. Meanwhile, online marketing by SMI is utilizing the presence of marketplaces (GoFood, GrabFood, Shopee, Tokopedia, MaximFood, ViuIT) for broader marketing.

Consumers who are satisfied with the service at the online store will provide a review so that new customers can view product reviews. The Marketplace also offers convenience for SMI business operations such as bookkeeping reports.

Work is more efficient because it saves time and costs and minimizes the risk of errors in processing consumer orders. Marketplaces effectively assist SMI in managing product stock taking, managing profit margins, and promoting in various marketplaces.

In this T-test, measurements were made on SMIs that previously only carried out offline marketing for at least 6 months. These characteristics are used to determine respondents because SMI performance will calculate turnover growth before and after adopting the marketplace. Most respondents experienced an increase in turnover of > 35% after adopting the marketplace.

Table 7. T test results– Test Paired Two Samples for Means

Prior to Marketplace Adoption After Marketplace Adoption

Turnover's Mean Rp. 18,678,000 Rp. 26,200,600

Variances 3.61021E+14 6.26302E+14

Observations 50 50

Pearson Correlation 0.9671623

Hypothesized Mean

Difference 0

df 49

t Stats -6.472723455

P(T<=t) one-tailed 2.17649E-08

t Critical one-tail 1.676550893

P(T<=t) two-tailed 4.35299E-08

t Critical two-tail 2.009575237

The mean after > the mean before adopting the marketplace and value P(T<=t) two-tailed<

0.05, which is 4.35299E-08. So, it can be said that the use of the marketplace has a significant positive effect on SMI turnover. According to research Abebe who said that the benefit of marketplace adoption is the ability to generate increased sales volume from both old customers and new customers which is in line with turnover growth.

b. Entrepreneurial Orientation on Marketplace Adoption and SMI Performance (Direct)

Based on the results of the analysis conducted, it is known that entrepreneurial orientation influences marketplace adoption. The following are the results of the analysis presented in table 8.

Table 8. Results of Testing the Effect of EO on Marketplace Adoption and SMI Performance

No Relations Between Variables Path

Coefficient P-values Results Explanatory Variables Response Variable

1 Entrepreneurial Orientation (X1)

Marketplace Adoption

(Y1) 0.325 0.006 Accepted

2 Entrepreneurial

Orientation (X1) SMI Performance (Z1) 0.299 0.011 Accepted

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Based on the table above, it is found that there is an influence of entrepreneurial orientation on marketplace adoption and SMI performance. Entrepreneurial orientation variables on the autonomy dimension such as evaluating company performance through suggestion/complaint boxes can directly contact SMIs through the marketplace application, social media, or the hotline listed on the food/drink box.

SMI provides many means to make it easier for consumers to reach companies. Most of the company evaluations were realized (75%). For SMI products that ship products out of town, they also provide returns or compensation with the condition that they report no later than 1 x 24 hours after the product is received and accompanied by an unboxing video. In the innovative dimension, there is the transformation of digital products that can maintain product safety so that it reaches consumers in good condition. Product protection use bubble wrap, cardboard, paper cup bowl, styrofoam, fragile stickers, food seals, thick plastic bags, cool pad, and so on. On average, the handling of applications for receiving online orders will be handled by employees, while the owner will only do monitoring. Content creation on social media is usually discussed with employees. In this case the owner believes the credibility of his employees in taking control of online marketing.

When entering the marketplace, SMI is ready for the high risk of competition with various policies set in the application. On the proactive dimension, SMI is responsive to changes in customer demand at certain moments and actively offers promos to attract consumer interest. On average, SMI offers promos at least more than 2 times a month. Promotions can be in the form of discounts, cashback, budling promos,

vouchers, subsidies and free shipping, free testers from new products, giveaway.

On the competitive aggressiveness dimension, the average SMI has participated in the bazaar more than 3 times, such as during the Harmoni Fair, Harmoni Ramadhan Fest, Car Free Day, Shopping Week, and so on. A meaningful logo will make it easier for consumers to remember a brand. Most SMIs prioritize quality rather than offering low prices with low quality.

Online marketing is carried out in a variety of ways, starting from endorsing social media celebrities, actively creating content on social media accounts, promotions through marketplaces, email, telegrams, and the culinary business community on Facebook. Paid or free advertisements on marketplace applications are also carried out in order to increase popularity and sales. If you do not want to be complicated, SMI can also take part in the promos that have been held by the marketplace. In order to collect good reviews and become a best seller product, the first step for SMI is to lower the price, which only makes a small profit. When there are enough and good ratings, SMI starts to raise product prices. Some SMI have also bought competitors' products to compare and evaluate with their own products, see the prices offered by competitors, and so on.

c. Role of Government on Marketplace Adoption and SMI Performance (Direct) The third subchapter is intended to answer the second objective in this research. Testing the fourth and fifth hypotheses in this study looked at the path coefficient and p-value. The following are the results of testing the research hypothesis presented in table 9.

Table 9. Results of Testing the Effect of GOV on Marketplace Adoption and SMI Performance

1 Role of Government (X2)

Marketplace Adoption

(Y1) 0.430 <0.001 Accepted

2 Role of Government

(X2) SMI Performance (Z1) 0.263 0.022 Accepted

Based on the table above, it is found that there is an influence of the government's role on marketplace adoption and SMI performance. The government has provided facilities to SMI in the form of training on digital marketing (Shopee TikTok Shop, Tokopedia, creating interesting

content, and so on). Training information can be monitored through the official Instagram of SMI, WhatsApp group, or contacted directly by the Industry and Trade Office who are believed to fit the qualifications according to training needs and curated SMIs. The benefit of holding the training

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is that SMI can optimize the use of the marketplace. Taught from the start how to post photos, complete product descriptions, add products, promotions, serve customers, contact call centers, live shopping, and so on. After the training is done, questionnaire will be given regarding SMI issues and training needed by SMIs in the future to be proposed as further training material. The training provided was in accordance with the conditions of the pandemic at that time where online marketing skills were needed to improve business performance. Access to capital/granting credit through the bank's KUR program, according to SMI presentations, is also easy if it fits the collateral requirements.

Currently, the Industry and Trade Office is also providing capital assistance services with the requirement of a Identity Card, Business Identification Number, Business Certificate, from the sub-district, and including the Budget Estimate Plan. As of June 1, 2020, the government provided subsidies for People’s Business Credit >50%. Previously the interest rate was 14% but now the People’s Business Credit interest rate is only 6% effective per year.

This greatly relieves business actors because interest rates are the main factor in considering access to capital. The existence of People’s Business Credit is expected to expand access to productive business capital, increase the competitiveness of a business, drive economic growth, and increase employment.

The government also facilitates in all licensing matters. For example, business licensing is now by online, known as Online Single Submission (OSS) (Government Regulation of The RI, 2018) The process is fast and only takes a maximum of 60 minutes, and it can be accessed anywhere. This is considered efficient because previously the offline licensing

process took 3-4 working days. After the requirements process is complete, the business license intention will be issued after the perpetrator registers with OSS. The Government also provides free halal certificate facilities, PIRT, nutrition facts for SMI. Halal certificates help expand market reach because consumers do not need to doubt the product from the halal side.

Consumers also feel calm when buying food products that are legal and have clear safety.

Some of the respondents that the researchers met, such as Pakuaty, Chocolazo, and Tahu Takwa Pak Min, received assistance with tools such as a sealer machine, a dynamo milling machine, and a chopper machine.

However, it is necessary to increase the level of training material to the next stage.

Because until now the material being taught is still for new users/beginners. The topics given are expected to be more upgraded. Discussing taxes, after the ratification of Government Regulation of The RI Number 24 of 2018, the government exempted income tax for SMI whose turnover is still below IDR 500 million per year or referred to as Non-Taxable Income (PTKP). Meanwhile, turnover above IDR 500 million per year will be subject to income tax of 0.5%. The tax cut from 1% to 0.5% certainly eases the burden on SMIs including SMI and has a big impact on business opportunities.

d. Marketplace Adoption on SMI Performance (Direct)

The fourth subchapter is intended to answer the second objective in this research.

Testing the sixth hypothesis in this study looks at the path coefficient and p-value. The following are the results of testing the research hypothesis presented in table 10.

Table 10. Results of Testing the Effect of Marketplace Adoption on SMI Performance

1 Marketplace Adoption

(Y1) SMI Performance (Z1) 0.397 <0.001 Accepted

In the table above, it was found that there was an effect of marketplace adoption on SMI performance. It can be seen from the first dimension, namely the quality of the system that the application is considered user friendly which is easy to control, understand, and flexible. While most respondents stated that personal data

uploaded to the application felt secure. From the survey conducted, only 10% of the respondents had ever received a fake phone call, claiming to be from the marketplace, and even getting a fraudulent link on behalf of the marketplace application. But fortunately, the seller is wise in dealing with problems like this. So that there are

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no victims affected by fraud from irresponsible person.

On the dimension of information quality, the marketplace is effective in improving performance due to wide marketing reach, not too large marketing costs, obtaining evaluation information from consumers, being able to reach consumers, monitoring transactions anywhere, viewing order history, business reports, managing menus, stock, and hours. operational easily. The third dimension is service quality, a solutional customer service / help center and serving user complaints well, although there are several SMIs that say the handling is quite long. This might happen when the application is down simultaneously so that there are many complaints about the application. The application has provided many payment options. Buyers can make payments via OVO, Go Pay, Shopee Pay, debit cards, credit cards, bank transfers, Cash on Delivery, marketplace partners, Link Aja, and so forth. Disbursement of funds on the marketplace is also fast, on the Shopee application. If the buyer does not click “Order Received” until the Shopee warranty period ends, then the seller will receive the funds within a maximum of 1x24 hours. On the Grab Food application, sellers can withdraw funds the next day with a minimum accumulation of IDR 25,000. In the Go Food application, the funds will be disbursed the next day if there is a seller's request via the Go Biz

application. If there is no request, the funds will be disbursed every 28th at 04.00 WIB. The fourth dimension is user satisfaction, users feel effective and efficient when utilizing the marketplace for their business.

Dimensions of user lever or system use such as high intensity (almost every day) users/sellers regulate menu availability, menu variations, product ratings. The prices charged on the application and offline are different. This because the application has admin fees. However, consumer can take advantage of the promos listed in the application so consumers do not have to spend a lot of money to buy food/beverage online. Consumers also feel relieved by the free shipping. In the last dimension, namely net benefits, productivity increases after utilizing the marketplace and consumers are also satisfied with the services provided. Consumer ratings will be recorded and automatically in the marketplace application so that sellers work efficiently to evaluate their business.

e. Entrepreneurial Orientation and Role of Government to SMI Performance through Marketplace Adoption (Indirect)

The fifth subchapter, the seventh and eighth hypotheses in this study look at the path coefficient and p-value. The following are the results of testing the research hypothesis presented in table 11.

Table 11. Results of Testing the Entrepreneurship Orientation and the Government's Role on SMI Performance through Adoption Marketplace

No Relations Between Variables

Coef. Track P-

values Results Indirects

H7 Entrepreneurship Orientation (X1) Marketplace Adoption (Y1)

SMI Performance (Z1) 0.129 0.041 Accept

H8 Role of Government (X2) Marketplace Adoption (Y1) SMI

Performance (Z1) 0.171 0.015 Accept

The seventh and eighth hypotheses for the analysis of mediated effects using Sobel's standard error are discussed in Kock (2014) where this feature is used for mediating effects of various levels of complexity. Sobel test using an online calculator quantpsy.org p-value of 0.041.

So, it can be said that H0 is rejected and H7 is accepted. The seventh hypothesis which states that the effect of entrepreneurial orientation on SMI performance through marketplace adoption is proven. This is supported by research Abebe (2014) that the level of entrepreneurial orientation of managers significantly increases

the utilization of marketplace technology which affects company performance. They can take advantage of various marketplace tools to take more risks, explore new business opportunities, create new business products/services and respond to the ever-changing business environment so that the business remains competitive in the market. The positive and significant relationship between marketplace adoption and SMI performance indicates that marketplace adoption is a critical success factor that can improve the company's internal

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processes and strategies and ultimately impact performance.

While the eighth hypothesis for the analysis of mediating effects using the Sobel standard error resulted in a p-value of 0.015 (Kock, 2014). So, it can be said that H0 is rejected and H8 is accepted. The eighth hypothesis which states that the influence of the government's role on the performance of SMIs through marketplace adoption is proven. This is in accordance with the statement Chen et al.

(2021) regarding the importance for the government in making regulations that also encourage marketplace activities in order to grow the national economy. The emergence of the marketplace as a new technological innovation that not only changes business processes but also consumer behavior. The government is a strong entity in accelerating the growth of marketplace application (Maier & Wieringa, 2021).

5. Conclusion

The conclusions obtained from this study are as follows:

a. Based on the results of the research conducted, it is known that the condition of SMIs has improved after adopting the marketplace. Judging from the significant turnover growth before and after adopting the marketplace. It can be interpreted that marketplace adoption has a positive effect on the SMI performance.

b. Entrepreneurial orientation has a significant positive effect on marketplace adoption and SMI performance. The dimensions of entrepreneurial orientation that have the greatest influence are autonomy, innovative and proactive. This result is due to the fact that the majority of SMIs are very open to suggestions and criticisms from consumers. Consumers can reach SMIs through social media, marketplace applications, or hotlines listed on cashiers and food/drink boxes. SMI strives to provide satisfaction to customers and continues to make product improvements. Most company evaluations were able to be realized so that it can be said that SMI was able to run its business independently and solve company problems. Store employees pay close attention to product safety during delivery so that it reaches consumers in good

condition. Employee involvement in the business can spur creativity. SMI is able to cope with increasing customer demand and often offers attractive promos.

c. The government's role has a significant positive influence on marketplace adoption and SMI performance. All dimensions of the role of government have the same influence. The government actively provides facilities to SMIs, especially during a pandemic, namely in the form of training on digital marketing (Shopee, TikTok shop, Tokopedia, creating interesting content, and so on). The existence of training is expected to optimize the use of the marketplace so that SMI performance increases.

d. Marketplace adoption has a significant positive effect on SMI performance. The dimensions of marketplace adoption that have the greatest influence are service quality and information quality customer service user complaints in a solution, friendly manner, and serve user complaints well. The marketplace application provides information such as ratings from consumers, encourages the creativity of service providers, increases customer satisfaction, can reach consumers, transactions are brief and can be monitored anywhere, presents order history, business reports, menu settings, stock, and operating hours easily.

e. In the indirect effect test, marketplace adoption stimulates SMI performance positively and significantly even though the indirect path coefficient value < the direct coefficient value.

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