E-commerce to support Indonesia’s small businesses

As Covid-19 continues to spread, it is important to support Indonesia’s micro, small, and medium enterprises (MSMEs) to enable them to thrive. And e-commerce iws just the solution to achieve this.

In December 2020, a World Bank and Shopee survey of 15,000 local online merchants showed that digital businesses were more resilient compared with offline businesses during the pandemic. Nearly 80 percent of those surveyed reported sustained business in 2020, higher than the less than four of ten offline firms.

Online merchants who adopted digital tools, e-commerce platforms, and social media early were able to rebound faster, as sales rose to pre-pandemic levels about six months after the first peak of local Covid cases, while offline firms experienced a more than 20 percent decline in year-on-year sales. This resilience was attributed to the need for fewer workers to continue operating the digital platforms and the wider customer reach.

The report also found that e-commerce provided additional income for new Indonesian merchants during the pandemic, with 25 percent of those surveyed only starting their online business during that period, due to necessity. More existing sellers, on the other hand, became the family breadwinners and used e-commerce as their main income source.

About 40 percent of those surveyed changed the product categories they sold, while 17 percent expanded their product range to include health products, resulting in better sales. About 20 percent said they received government assistance through cash transfers. About 23% expressed the need for digital skills training in sales, marketing, and logistics.