The perfume industry is growing rapidly, but MSMEs face challenges in digital technology readiness and marketing strategies. This study aims to examine the impact of technology readiness and digital competitive capabilities on product innovation and business performance. This research uses a quantitative method, with data from 117 respondents of Baba Parfume MSMEs analyzed through questionnaires. The results show that the influence of digital competitive capability and technology readiness is not yet significant. Additionally, the role of product innovation has been proven to have a positive influence on the relationship with business performance. The implication is that MSMEs need to focus on improving business performance through digital strategies to drive sustainable innovation and competitiveness.
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