More Local Products Must Expand to Local E-commerce: Trade Minister

TEMPO.CO, Jakarta - Trade Minister Muhammad Lutfi on Wednesday asked domestic businesses - especially micro, small, and medium-sized enterprises (MSMEs) - to establish partnership with e-commerces to help grow sales and transactions. 

He said digital platforms can be an opportunity for local brands to promote their products amidst restricted market access. 

“Our products must be able to fill local markets and entrepreneurs must continue to expand to win the domestic competition,” said Lutfi in a virtual discussion with Indonesian e-commerce Tokopedia on March 24. 

Moreover, the Minister said that Indonesia has a major market for the digital economy sector. He claimed that in 2020, the country’s digital economy reached $44 billion, which is an 11 percent growth compared to that in 2019.

The digital economy valuation in Indonesia is predicted to continue to skyrocket, reaching $125 billion by 2025 - which Minister Lutfi believes would potentially be the largest in Southeast Asia. 

Citing the data from Statistics Indonesia (BPS), Minister Lutfi said 90.18 percent of entrepreneurs that offer goods and services in 2020 were on digital platforms, 48.4 percent of them were in the sectors of major trade, retail, repairs, and automotive maintenance. 

However, he noted that as many as 85 percent of MSMEs in e-commerce suffered drastic sales drop due to the Covid-19 crisis last year. 

Read: Jokowi: Unfair Digital Trade Killing MSMEs

FRANCISCA CHRISTY ROSANA