Digital Adoption Decisions of Bandung Culinary MSMES: A Bounded Rationality Perspective on Market Demand Uncertainty
DOI:
https://doi.org/10.55681/armada.v4i9.3776Keywords:
Digital Platform Adoption, MSME, Culinary Sector, Bounded Rationality, Market Demand UncertaintyAbstract
This analysis explores how Bandung, Indonesia's culinary micro, small, and medium-sized businesses (MSMEs) decide whether to adopt digital platforms in the face of perceived market demand uncertainty. In-depth interviews with seven culinary MSME owners at different adoption stages (non-adopters to frequent multi-platform users) are analysed using a qualitative exploratory approach based on Herbert Simon's concept of bounded rationality, complemented with profile questionnaires from all seven respondents. There are four findings: (1) the non-linear relationship between digital adoption stages and business longevity; (2) drivers of digital adoption encompassing competitive advantage, market expansion amid demand volatility, operational efficiency, and platform promotion offers; (3) barriers to adoption attributable to generational gaps, limited digital literacy, perceived complexity, high platform costs and costly digital equipment (4) substantial dependence on trial and error experience, as a primary heuristic, rather than systematic cost-benefit analysis. Most digitally engaged businesses rely on younger family members for digital assistance, while one respondent who joined a formal digitalisation program perceived it as having limited impact. These results have a critical implication for developing experience-based digital literacy programs and extending bounded rationality into micro-scale culinary businesses in this ever-growing market.
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