<![CDATA[Kampung Inggris Pare was selected as the context of this study because it represents Indonesia’s most prominent language-immersion destination, where continuous interactions between students and local MSMEs create unique opportunities for informal English acquisition and business transformation. Despite its economic and educational significance, research examining how this immersion ecosystem shapes MSME competencies remains limited. This qualitative case study investigates how functional English literacy transforms micro, small, and medium enterprise (MSME) competencies within Kampung Inggris Pare’s immersion-based edutourism ecosystem. Grounded in experiential learning theory, communities of practice theory, and human capital theory, data were collected over six months from 20 purposively selected informants consisting of 10 MSME operators, 4 language tutors, and 6 course participants, complemented by 30 days of participant observation, 30 documents, and two focus group discussions. Thematic analysis generated 187 codes consolidated into 8 categories under 3 themes. Findings reveal a three-phase transformation trajectory consisting of foundational literacy acquisition, commercial adaptation, and proficiency internalization, with considerable individual variation. The perpetual immersion environment was unanimously identified as the primary facilitator, while age-related difficulties and grammatical inhibition constituted the principal constraints. Marketing practice changes were differential across the 7P dimensions, with People and Process showing the most consistent transformation. The study contributes the Immersion-Mediated Competency Transformation model, identifies bidirectional peripheral participation as a novel community of practice dynamic, and reconceptualizes immersion as an embedded marketing context. Limitations and directions for future comparative, longitudinal, and mixed-methods research are also discussed.]]>
