Effects of Online Marketing on Small Enterprises: A Study on the Local Clothing Brands in Bangladesh

Abstract

The rapidly growing clothing sector in Bangladesh, particularly among informal Small Enterprises, now appears to be at a crossroads – a context marked by the creative potential of global digitalization and a demand for change. A key dilemma, however, is that most marketing and innovation adoption theories are rooted in strong formal institutional and resource-rich contexts. This significantly limits their ability to examine value creation in resource-constrained, informal economies effectively. This outmoded paradigm, based on conditions that have not yet materialized for most informal sector entrepreneurs, leaves a significant theoretical and practical gap. This study effectively fills a crucial gap by investigating how local, informal micro and small clothing enterprises in Bangladesh efficiently use online marketing as a viable solution to overcome common systemic and market barriers. In arguing for a profoundly context-dependent theoretical grounding, this study offers valuable insights into how the processes of digital adoption and value creation unfold under context-specific socio-cultural, infrastructural, and gender barriers in a developing nation. It seeks to create a refined representation that captures the essence of the concept and lays the foundation for identifying new value-creating sources in future generations of business worlds, where established business models do not provide suitable instruments. More than simply descriptive, this study undertakes the challenging task of promoting a rigorous line of inquiry into the effects of online marketing by questioning the need to advance theory through the firm formalization of financial performance measures—namely, sales revenue. Beyond the more superficial analysis of engagement metrics, such as likes, shares, and comments, this study adopts an in-depth measurement of how digital culture impacts an individual. The results provide up-to-date and actionable competitive insights, pinpointing viii exactly where to focus online marketing efforts for the greatest return on investment for smaller firms in this evolving marketplace. This offers a theoretically grounded glimpse into the critical mechanisms and motivations shaping micro- to small-sized firms at the global periphery in ways that allow them to negotiate, overcoming resource deficiencies, the complex terrain of late digital technology adoption and diffusion. To address the identified theoretical, methodological, and contextual gaps intentionally, a systematic, multi-step mixed-methods research design was employed in the study. This holistic model was purposively built on six theoretical bases, namely the AIDA Model, Trusted AIDA Model, Social Exchange Theory (SET), Technology Acceptance Model (TAM), Diffusion of Innovation (DOI) Theory, Resource-Based View (RBV), and Customer Engagement Theory (CET). This comprehensive theoretical model provides a strong basis for understanding the multidimensional adoption process of online marketing, ranging from macro or external-level to micro or behavioral-level influencing factors. This particular coupling of theories had the critical advantage of providing an opportunity to develop a more nuanced understanding of the complex interplay between individual agency and structural context in creating effective online marketing structures, particularly in resource-constrained and informal settings. The quantitative phase of this study, employing an explanatory sequential mixed-methods approach, grounded the understanding of online marketing effectiveness in small Bangladeshi clothing businesses. A systematic random sample was taken from a master list of 1264 digitally active small clothing businesses in Bangladesh (the study population, provided by BSCIC databases). This rigorous sampling criterion helped ensure that all 510 respondents (corresponding to a rich 40% of the potential sample) were online marketing-active respondents, and consequently, considerably increased the credibility and validity of the data for regression ix and factor analysis. This rigorous technique led to the discovery of four critical factors in online marketing. Multivariate analysis, performed through multiple regression analysis, showed that Digital Engagement (β = 0.445) was the most relevant predictor of sales. In contrast, Web Optimization (β = 0.309), Viral Content (β = 0.283), and Affiliate Campaigns (β = 0.102) were other relevant and equally important predictors. More importantly, the model accounted for an outstanding 74.2% of the variation in sales revenue (R² = 0.742), which underscores the joint and significant effect of these factors in enhancing business performance within resource-scarce environments. These results provide strong evidence on the internet marketing strategies that work best for small firms in the informal sector of the economy. Complementing this, the inductive, in-depth qualitative phase, which included 20 expert interviews and four embedded case studies, revealed a complex and nuanced picture of the micro- and macro-level processes constraining online marketing uptake. Rigorously inductively coded and narrowly focused on the consolidation of quantitative constructs, entrepreneurs' lived experiences revealed important micro-level issues, such as digital fatigue, content burnout, platform-specific skill gaps, and the balance of skills between traditional and online marketing. At the same time, substantial obstacles to effective online marketing were also encountered at both macro and organizational levels, including low visibility associated with gender, the significant influence of informal networks, and a notable lack of digital support. Hundreds of these qualitative data provide a complementary strength to the quantitative results by offering a detailed description of what, on the ground, the realities and structural settings that have a significant impact on the adoption and performance of online marketing practices look like. This key data triangulation—and even more so for Digital Engagement, where powerful evidence-based influences and robust effect sizes generated by the quantitative side were substantiated by x qualitative material insights into emotional labor and peer support aspects—significantly strengthens the study's meta-validity. This system's focus not only highlights the urgent need for localized, inclusive, and scalable approaches to both individual and system-level barriers to informal business but also starkly suggests that online marketing can only serve as a sustained competitive advantage if these multi-level constraints are appropriately mitigated. This research makes several significant contributions to theory. Firstly, it significantly enhances the TAM model by integrating socio-cultural legitimating and gendered visibility into the model, thereby better explaining non-formal technology adoption and making it more context-specific and generalizable across varied cultural contexts. Second, this study contributes to the Resource-Based View (RBV) by describing how informal ventures productively assess and utilize readily available, low-cost online tools. They skillfully apply social capital and resourceful ingenuity to compensate for their lack of traditional resources, thus adding value to a critical coverage area where RBV is used in emerging countries. Third, it advances the Diffusion of Innovation (DOI) theory by not only contesting the linear models primarily posited in the industrialized world but also by emphasizing that deeply rooted social norms and well-entrenched infrastructural bottlenecks are significant obstacles to the diffusion of complex technologies. This offers a fresh perspective on the unique strategic logic of informal enterprises and their distinctive, often non-linear, search for viral content, alongside a hybridization of traditional and online marketing tools and other performance dimensions beyond standard metrics. The study results also have several practical implications. Diverging recommendations for informal entrepreneurs, therefore, are to facilitate culture-appropriate content creation, promote gradual internet adoption, design relevant content literacy programs, and strategically xi exploit informal affiliate networks for organic growth. Importantly, the lessons are broader than just for individual enterprises, yielding essential policy implications for governments and donors to support infrastructure-sensitive digital enablement at the national and sub-national levels. Simply, this approach takes into account the existing economic and socio-cultural constraints and advocates for gender-inclusive digital literacy programs for equity of access and participation. And interestingly, these are not just "best practices" – in the traditional "one-size-fits-all" sense – but are very deeply and specifically rooted in, and emerge directly from, the particular context, the local conditions of implementation, of the informal economy in Bangladesh, a resource-starved, information-dark, infrastructure-weak country – and very likely context-specific, context-contingent in other low-infrastructure economies. Recognizing the cross-sectional nature and self-reported sources of data as potential sources of bias and limitations to the generalizability of the results to other domains or cultural contexts, this study provides novel empirical evidence essential for understanding the process of digital transformation in the informal economy. While emphatically rejecting the mechanical transfer of Western online use, it also strongly promotes a bottom-up, inclusive, and performance-oriented strategy, as it is far more responsive to changing market conditions. The findings also highlight an urgent and undeniable demand for contextually specific, culturally embedded digital interventions for informal economies. From a future research perspective, researchers should consider using longitudinal panel studies to track the development of digital maturity and gendered digital practices among adolescents, while also examining the effects of local digital service providers as mediators and the dynamics between regions. In addition, the results emphasize the urgent and unavoidable need for further theoretical exploration in this xii crucial topic, to develop a comprehensive understanding of the socio-cultural embeddedness and adaptive susceptibility of digital adoption.