AI Capability and Digital Transformation The Moderating Role of Sustainable Innovation in Shaping Perceived Competitive Advantage

Abstract

The growth of e-commerce has intensified competition, necessitating the need for companies to build competitive advantage through the integration of digital capabilities and sustainable business practices. This study analyzes the influence of AI Capability and Digital Transformation on Perceived Competitive Advantage and examines the moderating role of Sustainable Innovation. The study employed a quantitative approach with a survey of 160 Generation Z Shopee and TikTok Shop users in Maluku Province, Indonesia. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that AI Capability and Digital Transformation have a positive and significant effect on Perceived Competitive Advantage, with Digital Transformation having a stronger effect. Furthermore, Sustainable Innovation significantly strengthens the influence of both AI Capability and Digital Transformation on Perceived Competitive Advantage, indicating that a sustainable innovation orientation enhances the effectiveness of digital capabilities in creating value for customers. These findings indicate that competitive advantage in e-commerce depends not only on technology adoption but also on an organization's ability to integrate sustainability principles into its innovation strategy. This research enriches the marketing and digital transformation literature through the integration of Resource-Based View, Dynamic Capability Theory, and Stakeholder Theory, while providing practical implications for e-commerce platforms in designing customer-oriented digital strategies that are in line with the expectations of Generation Z consumers.