A Dissertation Submitted in Partial Fulfilment of the Requirements for the Degree of Master of Business Administration in Corporate Management (MBA-CM) of Mzumbe UniversityE-commerce has become a key phenomenon in today’s world of business. It is modern way of doing business and this mode has been adapted perfectly in the developed countries unlike the developing countries where by it is still in its growth stage. This is caused by a number of challenges like inefficient network infrastructures, security issues and other online transactional obstacles. All these challenges seem to hinder the engagement of traditional retailers to e-commerce business system. The principal focus of this study was to assess the challenges of e-commerce engagement to the traditional retailers. Selected traditional retailers were referred as the case study where intensive study was done to get information related to the research problem. The study was conducted based on the following specific objectives: To evaluate technological perceived usefulness on adoption of e-commerce to traditional retailers; to examine the perceived objective use of e-commerce by traditional retailers; to analyze perceived security risks towards e-commerce engagement by traditional retailers The study area was at Ilala Municipal specifically in Ilala district where the sample of traditional retailers were selected in stratified and purposively sampling techniques to get the knowledgeable respondents on the issues related to e-commerce. 150 responded to distributed copies of questionnaire. Based on the content analysis, more than 60 percent have indicated that e-commerce has significant challenges that hinder the engagement of e-commerce by traditional retailers. The respondents’ perceptions revealed that e-commerce practice in Tanzania is facing technological challenges such as network inconveniences, online transactional cost and limits, trustworthiness issues like false personification, phishing, hackers and insecurity risk. Despite of the mentioned challenges, the users perceived e-commerce as the business mode that is easy to use since it takes short time and provides access of distant products.