TEMPO.CO, Jakarta - Despite the Covid-19 pandemic, not every micro, small and medium enterprises (MSMEs) were heavily affected. Those who managed to pivot their business digitally have surprisingly shown significant growth. This was stated by the Minister of Cooperatives and SMEs, Teten Masduki, in a webinar themed ‘Encouraging the Digital Transformation of MSMEs through E-Commerce’, Friday, August 13, 2021.

“MSMEs who sell office, school, and industrial related stuff are the most affected ones, due to the WFH regulation, their businesses have stopped. Those who are in the food and beverage sector also experience hardship. Although some MSMEs are still able to sell their products, their revenue is declining. Despite the circumstances, MSMEs who managed to transform their business digitally are those who survive and even thrive,” said Teten in a webinar broadcast on Tempo.co YouTube channel, Tempo Media's Facebook Live, and Tempo TV digital terrestrial broadcast.

This is in line with the results of a survey conducted by Tempo Data Science (TDS) regarding the e-commerce industry in Indonesia within the period of May-July 2021. According to the TDS researcher Ai Mulyani, to survive and thrive during the pandemic, most MSMEs (82 percent) are optimizing their online sales activities through e-commerce platforms and social media channels.

Survivial strategy in facing the pandemic

E-commerce roles during the pandemic

“The barriers for sellers to utilize online marketing platforms are insignificant. Hence, these minimum barriers to entry provide optimum benefits for MSMEs in utilizing the existing infrastructure provided by digital platforms,” said Ai.

The survey also found a phenomenon that sellers tend to be multi-user, meaning they utilize more than one platform at once. “According to the sellers, utilizing a few e-commerce platforms could maximize the reach of their target consumers,” said Ai Mulyani.

The benefit of the digital platform in sustaining MSMEs business was also felt directly by the CEO and Founder of Sovlo Indonesia, Lidya Valensia. Her business which evolved around promotional products for corporate and wedding souvenirs came to a halt in March 2020 as many office events and weddings were canceled.

With the repulse of drastic revenue decline and the consideration of her employees who might have lost their job, Lidya put on her thinking cap and pivoted her business by starting to use e-commerce platforms to sell and promote her souvenirs. “We start selling online at the end of May to mid-June 2021 and the response from our customers was great,” said Lidya.

According to Lidya, e-commerce platforms really bolster her business, “I choose a digital platform as it offers convenience. We don't have to develop our own website or hire a WhatsApp admin as everything is integrated within e-commerce. My choice goes to a digital platform which provides a lot of convenience and offers many helpful features for sellers,” she said.

Digital economy observer Aviliani believes that the MSME business model needs to change. In advancing the MSMEs, she encouraged the government to stipulate various regulations. In regards to digitalization, according to Aviliani, MSMEs digital penetration is still very low, with only about 13 percent of MSMEs are connected to digital platforms. “Frankly speaking, those MSMEs are selling similar goods which result in price competition amongst them,” she said.

According to Aviliani, MSMEs ought to have their own unique selling proposition in order to have a competitive advantage which helps to distinguish themselves from other MSMEs.

The best e-commerce for MSMEs

Top E-Commerce choice by Indonesian MSMEs

The TDS survey revealed that the digital platforms Tokopedia and Shopee were two of the most popular marketplaces among MSMEs to help them sell their products online. The popularity of these two marketplaces is more prominent compared to their competitor, which is 99 percent for both Tokopedia and Shopee.

In terms of top of mind (TOM) quality, brands that are on the tip of the tongue, it was revealed that Tokopedia was the main choice with 35 percent, competing with Shopee (34 percent), followed by Bukalapak (13 percent), Lazada (7 percent), Blibli (7 percent) and JD.ID (3 percent).

“E-commerce that provides the most frequent transaction is Tokopedia (36 percent), followed by Shopee (33 percent), Bukalapak (13 percent), Lazada (9 percent), Blibli (6 percent), and JD.ID (3 percent),” said Ai Mulyani. (*)

INFO TEMPO