This study aims to analyze the effect of cost-effectiveness and interactivity on the financial performance of MSMEs with the adoption of TikTok as a mediating variable. The background of this research is driven by the phenomenon of the shift in millennial consumer behavior towards social commerce and the high potential market for preloved products in Indonesia. This study used a quantitative method with a purposive sampling technique. Data were collected through questionnaires from 110 MSME business respondents, predominantly from the fashion sector who actively use TikTok Shop. Data analysis was conducted using the Structural Equation Modeling - Partial Least Squares (SEM-PLS) approach. The results showed that cost-effectiveness and interactivity had a positive and significant effect on the adoption of TikTok social media. Furthermore, social media adoption was proven to have a significant effect on improving the financial performance of MSMEs. Another important finding is that social media adoption can mediate the relationship between cost-effectiveness and interactivity on business performance. The implications of this study suggest that MSMEs should maximize interactive features (live streaming) and utilize platform cost efficiencies to boost sales volume and profitability.
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