THE COVID-19 pandemic that has occurred throughout 2020 to 2021 has had a major impact on every aspect of life, including the Indonesian economy. All businesses from various industries were affected, including micro, small and medium enterprises (MSMEs) in Indonesia.
Referring to Bank Indonesia data that 87.5% of MSMEs were affected by the pandemic, with 93.2% of them being negatively affected on the sales side (data as of March 2021). From a sectoral perspective, the food and beverage business are the sector most affected, both on a large and retail scale. Then followed by MSMEs in wholesale and retail trade from the car repair and maintenance sector as much as and the processing industry.
Research by the Indonesian Ministry of National Development Planning (Bappenas) found that throughout 2020, there were two main problems faced by MSMEs affected by the pandemic, namely financial and supply/demand problems.
This condition is further exacerbated when MSMEs still lack mastery of digital platforms, which incidentally is one of the things that is widely used to carry out many activities in various sectors during the pandemic.
More than 80% of people in tier 2 and 3 cities lack understanding of digital platforms. In these small towns, MSME businesses are usually run by one older person. While Kearney in his writings explains that people over the age of 55 tend to be skeptical of technology, so they are slow to adopt digital services.
This of course causes losses for MSMEs, especially when mobility restrictions such as implementation of restrictions on community activities (PSBB) or (PPKM) are enforced and people switch from physical stores to e-commerce or digital platforms.
Another problem that makes it difficult for MSMEs in small towns to grow is the lack of internet connection which is still inadequate in some rural areas. APJII 2019-2020 data in the second quarter shows that the Contribution of Internet Penetration per Region of Total Penetration 2019-2020 in the second quarter is still dominated by the island of Java, while the islands of Maluku and Papua are in the last position.
Benefits of digitizing MSMEs
Special Staff of the Minister of Cooperatives and SMEs, Fiki Satari said that digital marketing strategies (digital marketing) have a number of benefits and advantages if adopted to help MSMEs grow.
“These benefits include a more specific and broader consumer reach, reducing operational costs, can be done anywhere and anytime, and in accordance with the times,” said Fiki in a virtual discussion some time ago.
Digitization certainly dispels the perception that business success can only be achieved if it is carried out in big cities. Because by utilizing digital platforms, MSMEs can develop businesses in their respective regions, improve the regional economy and preserve regional superior products.
For example, a sei sapi trader in the Kupang market can use a digital platform to sell cow sei. By utilizing the digital platform, these traders can certainly reach buyers from outside Kupang and even to all corners of Indonesia.
When these commodities can be marketed widely, this will certainly have a big impact ranging from cost efficiency to greater turnover.
In addition, consumers, especially in other areas, including in big cities, also feel the benefits. For sei beef lovers, they don’t have to go far to Kupang to enjoy authentic beef sei cuisine. It is enough to order through an e-commerce platform, in a few days the goods will come and be enjoyed.
These conveniences and advantages must be utilized, not only to improve the economy but also the welfare of the community.
Support for MSMEs
The chairman of the Indonesian House of Representatives, Puan Maharani some time ago stated that supporting efforts to accelerate digital transformation for MSME players in the country is the same as helping the backbone of the economy of the Republic of Indonesia. According to Puan, digitalization of marketing for MSMEs will help the community’s economy, especially in the era of the COVID-19 pandemic, which ultimately contributes to the national economy.
Puan said, if from the size of each individual, Indonesian MSMEs look small, but if they are combined together, it will be clear that the contribution of MSMEs to the Indonesian economy is very clear. The chairman of the DPR RI stated that MSMEs absorb 97% of Indonesia’s workforce and their contribution to Indonesia’s GDP reaches around 61%.
Furthermore, there are many registered MSMEs with superior commodities in a number of small cities that are ready to compete not only in the local market, but can be marketed throughout the archipelago and globally.
Based on data from the official website of the Ministry of Cooperatives, there are a number of registered MSMEs with various superior commodities. In Kupang Regency, there are 44,639 MSMEs, Gowa District 937 MSMEs, Pekanbaru City 105,445 MSMEs, Malang District 417,373 MSMEs and Surakarta City 82,531 MSMEs.
These regions have also recorded growing performance in the last year. This is driven by the support of the national and local governments to increase public confidence, starting from support, assistance for digital transformation and vaccination for MSMEs.
With these results, other small cities should also be more advanced and known more widely so as to improve their performance.
Seeing this fact, Grab and Emtek Group are focusing their strategic cooperation in supporting and assisting the digitization of MSMEs in small cities to grow and compete with the support of digital platforms.
Through this partnership, the two companies plan to explore collaborations by leveraging the breadth of reach and unique strengths of each of Grab’s and Emtek’s ecosystems to achieve two key goals. First, encourage accelerated digitalization and create more income opportunities for millions of entrepreneurs in Indonesia. Second, providing digital services that are more affordable and offer more convenience for the people of Indonesia, even in areas with low levels of digitization.
To accelerate digitization, Grab Indonesia focuses on rural areas with high potential for MSMEs, considering that currently the majority of accelerated digitization is concentrated in big cities, where access and infrastructure are more complete and facilitate the process.
This inequality makes Grab and Emtek Group realize that there is a need for inclusive growth in order to promote MSMEs in smaller areas so that they can also contribute to the nation’s economic growth.
“The bright future of Indonesia’s digital era must be enjoyed by all levels of society. Grab and Emtek Group share a common vision and a view that aligns with our approach to building an open ecosystem to help solve some of Indonesia’s biggest challenges. As Indonesia moves towards Industry 4.0, we hope that no one will be left behind, and it has become a shared commitment to help create opportunities that can reach all,” said Ridzki Kramadibrata, President of Grab Indonesia when announcing the strategic partnership between Grab and Emtek Group several times. last time.
One of the points of focus in this partnership is the logistics and e-commerce sectors, which will also have a positive impact on the growth of MSMEs in rural areas.
Based on data from the East Ventures Digital Competitiveness Index 2021, increasingly advanced logistics facilities have a positive impact on the nation’s economic growth, especially those that have entered digitalization.
GrabExpress is a delivery service that also provides many benefits for the economic sector from selling goods digitally.
Fauziah Yusuf, for example, has run a business in making flower bouquets, snacks, and balloons in Makassar. Since the existence of the GrabExpress service in Makassar, Fauziah admits that she has received many conveniences to deliver her merchandise directly to buyers
“This GrabExpress service makes it easy for small businesses like me because they can send bouquets to five different addresses at once. This also makes it easy for buyers to wait for their orders to arrive,” he concluded. [antaranews]