TAF PUBLISHING

Small Medium Enterprises (SME's); Usaha Kecil Menengah (UKM) has a huge contribution in indonesia and asean economic. There is 96% micro business in ASEAN and 99% in Indonesia. Digital technology helps SME's move faster and more competitive in a national and international context. Technology and the Internet had a huge impact on economic growth in the world including Indonesia. The effective free market is the basic point of SMEs. Therefore, it needs the right strategy in increasing competitiveness to compete in AEC. Little Bandung is one of Bandung Goverment programs in increasing SME's to active in International business and contributes an economic growth nationally by becoming a part of the global value chain as a response to the AEC challenge. The purpose of this research is to identify the characteristics of SMEs in little Bandung. The research will analyze the impact of digital marketing on the competitiveness of SMEs little Bandung in AEC and the effectiveness factor of digital marketing in SMEs. The data collection process will be held in Indonesia. This research identifies three main variables that have the potential to influence Digital Marketing (DM) and Digital Leadership Capability (DLC) that is Digital Culture(DC), Digital Attitude (DA), Leadership Skill (LS). Furthermore, digital marketing and digital leadership capability are also tested whether they can influence competitiveness. The research is quantitative, which was collected by visiting SME's dan melalui google form. The data analysis method is partial least squares; structural equation modeling. The Findings depict that DA and LS have a significant effect on Digital Leadership Capabil- ity where an employee will have the capability if supported by the attitude and skills of the HR. Digital Culture and Digital Leadership Capability have a significant effect on Digital Marketing where every cultural dimension and capability of employees support in carrying out Digital Marketing. Digital Marketing has a significant effect on competitiveness where there is an influence between Digital Leadership Capability and Digital Marketing in running SME business performance.