Understanding AI-Assisted Social Commerce Practices among SMEs in Kudus, Indonesia

Abstract

The rapid growth of digital technologies has transformed the way Small and Medium-sized Enterprises (SMEs) conduct business activities, particularly through the adoption of social commerce and AI-assisted digital tools. This study aims to explore AI-assisted social commerce practices among SMEs in Kudus, Indonesia. A qualitative exploratory approach was employed involving eight SME owners from various sectors, including fashion, culinary, skincare, garment production, and hijab retail. Data were collected through semi-structured interviews and analyzed using thematic analysis. The findings reveal that TikTok has emerged as the dominant social commerce platform, with five out of eight participants utilizing it as their primary channel for promotion and customer engagement. In addition to TikTok, participants also used Shopee, Instagram, WhatsApp, ShopeeFood, GoFood, and GrabFood to support their business activities. The study further identified the use of several AI-assisted features, including chatbots, automatic caption generation, Canva-based content creation, and AI-generated promotional ideas. Interestingly, although participants actively utilized these features, many were unaware that the technologies they used incorporated artificial intelligence. This finding suggests that the level of AI utilization among SMEs is higher than the level of AI awareness. Furthermore, intense digital competition and the need to continuously create engaging content were identified as the primary challenges faced by SMEs in digital business environments. The study contributes to the growing literature on AI-assisted social commerce by providing empirical insights into how SMEs integrate digital technologies into their daily business practices and highlighting the importance of digital literacy, content creation capabilities, and AI awareness in supporting successful digital transformation.