Get Online or Lose Out, Indonesian Government Warns Small Businesses

JAKARTA, KOMPAS.com – Go digital or risk a potential collapse, the Indonesian government is warning small businesses in the country.

In fact, the government is confident of the positive trend boosting Indonesia’s digital economy which will grow further as the number of internet users in the country also increases.

According to the Indonesian Internet Service Provider Association (APJII), the internet penetration rate in Indonesia last year reached 196.71 million of the country’s entire population of 266.1 million people.

Read also: Indonesian SMEs That Resisted Digital Adoption Collapsed during Pandemic

The figure was an 8.9 percent growth from 2018, thus the country expects the internet penetration figures to grow even more in the coming years.

Taking this digital acceleration into context, Indonesian Minister for Cooperatives and SMEs Teten Masduki outlined the pros and cons of this promising trend.

On one hand, Indonesian SMEs and small businesses in Indonesia have the opportunity to take advantage of the technological advancement in their marketing strategy or production process.

On the other hand, Teten warns that Indonesian SMEs and small enterprises in the country could also collapse or be swallowed whole if business owners fail to keep up with the times.

Read also: Nearly Three in Every Four Indonesians are Internet Users

For that reason, the transition of getting the country’s small businesses to partake in Indonesia’s digital economy has become mandatory.

Nonetheless, Teten acknowledges that currently, numerous cooperatives across the archipelago have harnessed the digital ecosystem.

Government data puts the number at 906 cooperatives, or 0.73 percent of the total number of cooperatives nationwide, have a website.

Indonesia’s digital acceleration has also propelled the booming business of e-commerce in the country, which McKinsey projects will reach $65 billion in 2022.

Read also: E-Commerce Transactions Projected to More Than Double This Year in Indonesia

Given these figures, Teten would like Indonesian SMEs and small businesses in Indonesia to make use of the digital acceleration momentum initiated from the Covid-19 crisis to participate in the digital ecosystem.

Indonesia’s Minister of Cooperatives and SMEs emphasized the ministry’s commitment to assist more small enterprises to get on board the digital platform to expand their market reach.

(Writer: Elsa Catriana | Editor: Yoga Sukmana)

Source: https://money.kompas.com/read/2020/12/02/090200126/menkop--tanpa-mengikuti-arus-digitalisasi-umkm-akan-ambruk-ditelan-zaman