The expansion of online commerce has significantly changed the structure of the modern retail market and the relationship between businesses and consumers. This paper analyzes the impact of e-commerce on traditional retail, with particular focus on the challenges faced by small retailers in the digital environment. First, the development and growth of e-commerce are examined, along with the organizational and social aspects of digital transformation, through a comparative overview of traditional retail and electronic commerce. Special attention is given to the effects of low-price platforms, using the example of Temu, including their business models, margin reduction, and impact on local sellers. The paper also explores adaptive strategies that small retailers can implement to maintain competitiveness, including improving service quality, integrating online and offline sales channels, and enhancing logistics processes. By defining the research problem and posing key questions whether e-commerce inevitably leads to the disappearance of small retailers or encourages the transformation of their business models, the paper aims to provide a comprehensive insight into the challenges and opportunities of the digital economy. The results of this research contribute to a better understanding of the adaptation mechanisms of small retailers and provide a foundation for future development strategies in a digital environment. Additionally, the paper emphasizes the importance of informed policies and support measures to preserve sustainable competition in the retail sector. The conclusions indicate that digital transformation creates both challenges and opportunities for small retailers in the modern market environment.

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