ISSN: 2278-3369 International Journal of Advances in Management and Economics Available online at www.managementjournal.info RESEARCH ARTICLE N. Muhd. NA Rahman et.al.|Mar.-April. 2013 | Vol.2 | Issue 2|101-110 101 The Implementation of E-commerce Application in Bumiputera Small and Medium Enterprises (SMEs) in Malaysia N. Muhd. NA Rahman 1* , Zuraidah Sulaiman 2 , A. Bakar A Hamid 2 , Zainab Khalifah 2 , 1 Faculty of Business Management, Universiti Teknologi Mara, Kelantan, Malaysia, 15050 Kota Bharu Kelantan, Malaysia. 2 Faculty of Management and HR Development, Universiti Teknologi Malaysia, 81310 Skudai Johor, Malaysia. Abstract The proliferation of e-commerce in modern business today is primarily contributed by the global acceptance of Internet and WWW as a commercialization medium. E-commerce generally refers to business communication and transactions over the internet and, selling and buying products or services online. Studies shown that e-commerce not only significant to small businesses and individual consumers; but also reshapes both local and international market. Furthermore, e-commerce provides a mechanism that facilitates businesses to increase productivity, competitiveness, profitability and information management capabilities. This study aims to explore the level of e- commerce usage in Malaysian Bumiputera (indigenous) enterprises. The relationship between e-commerce usage and company’s characteristics as well as e-commerce benefits respectively are also studied. A structured interview with 5-point Likert scale questionnaire items was conducted on 423 respondents of small and medium enterprises (SMEs) nationwide. Data collected had been analyzed using descriptive and inferential methods such as percentage, mean, Chi-Square test, and Spearman Correlation Coefficient test. Results revealed that the level of e-commerce application Malaysia Bumiputera SMEs is only at publish level. This signifies that Malaysia SMEs are still far away in achieving the level four (transaction) and level five (integration). Most SMEs are applying only the basic application of e-commerce though they have websites being incorporated into their businesses. Keywords: Bumiputera smes, E-commerce application, Malaysia indigenous enterprises, Small and medium enterprises (smes). Introduction The business and commerce in today’s world have become more challenging yet exciting with the advancement in information technology and communication. Gerstner [1] asserts this by claiming that today and in the near future, the technology that surrounds us is undergoing a substantial, rapid and universal change that gives significant impact to the world we live in and our daily lifestyle. This development is also visible through the use of e-commerce in Malaysian business, which has changed the business approach used by small and large companies. E- commerce that is also better known as a method to sell products and services through network or Internet is acclaimed to emerge as an important business tool in the 21st century [2]. E-commerce is also frequently described as an opportunity tool for large companies and small medium enterprises (SMEs) to penetrate the global market, thus providing the most appealing way to publicly widespread the products and services. It is expected that SME will then be able to capture the global market, meet the international consumer’s need and requirement besides gaining opportunities to compete with the big, global player companies. Although operated in small scale, SMEs play crucial roles in the economic development and providing job opportunity [3]. In Malaysia, SMEs are important contributors to the national economic growth and in achieving the objective to become an industrial nation by the year 2020 [4]. Until December 2005, there are 518,996 SMEs in Malaysia which makes up the 99.2 percent of overall registered companies in Malaysia. As illustrated in Figure 1, SMEs in the Malaysian services sector is as many as 86.5 percent, manufacturing sector is 7.3 percent and 6.2 percent in the agricultural sector. Though Malaysia SMEs performances have increased over the years, yet there are still a few vital things that required attention particularly in term of access to export market and technological capability of SMEs business. As such, Malaysian