Over 300,000 MSMEs Go Digital amid COVID-19 Pandemic

TEMPO.CO, Jakarta - More than 300,000 micro, small, and medium enterprises (MSMEs) in Indonesia made the shift to digital platforms in wake of the COVID-19 pandemic, according to the Coordinating Ministry for Economic Affairs.

Between May 14, 2020 and June 9, 2020, as many as 301,115 micro, small, and medium enterprises underwent a digital transformation, said Coordinating Minister for Economic Affairs, Airlangga Hartarto, at a webinar on MSME adaptations in the new normal, in Jakarta on Friday.

The Coordinating Minister urged other MSMEs to take advantage of the momentum to increase their market penetration, as there has been a substantial shift in the market's consumption pattern from conventional to digital platforms.

He revealed the sectors of business that have surged significantly online include household needs, which has shown a 400-percent increase, followed by beauty products, which has grown by 80 percent, fashion (40 percent), and delivery services, which have seen a 35-percent jump.

The potential value of the digital economy is predicted to be higher this year at around US$35 billion, and is projected to reach US$101 billion in 2025.

According to the Ministry of Cooperatives and Small and Medium Enterprises (SMEs), there were 64.1 million SMEs in Indonesia, as of the first half of 2019.

As many as 63.3 million, or 98.6 percent, of the total SMEs operated micro-businesses, while the rest were medium-business operators (1.2 percent) and medium enterprises (0.09 percent).

Of the 64.2 million MSME actors, only 13 percent, or around 8.3 million, MSMEs have utilized digitalization in running their businesses.

Read also: COVID-19 Deals Crushing Blows to MSMEs

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