Understanding Factors Influencing a SME to Continue Adopting the B2B Marketplace to Maintain its Presence

The emerging online Business-to-Business (Liu, Sia and Wei) marketplace in China, with major websites such as Alibaba.com and ECVV.com, has presented a huge opportunity for Small-and-Medium Enterprises (Arend) to reach out to an extensive pool of potential corporate customers. This would not have been possible through conventional strategies such as trade fairs and road shows. Despite the availability of B2B opportunities, SMEs may not be able to benefit from participation in the B2B marketplace. Prior to making a decision on participation in the B2B marketplace, an SME needs to decide on whether to pay for its presence on the website of a B2B marketplace operator. Building on the real option theory, this study seeks to examine such a decisional situation by proposing and validating a set of factors, which could potentially influence the decision of an SME to continue (Adner and Levinthal) its position in the B2B marketplace. Results from a survey involving 74 SMEs reveal that the perceived flexibility in such investments significantly affects the perceived real option value, which in turn affects the inclination of an SME to continue its presence in the B2B marketplace.