Time for the “Stay-at-Home Economy”

The Covid-19 epidemic has given birth to the phenomenon of the “stay-at-home economy”. Changing consumer behavior has created opportunities and requires business players to adapt.

KOMPAS/RIZA FATHONI

Traders at the Pasar Binaan Market, Jatibaru, Tanah Abang, Central Jakarta, take photos of clothing with cellphones for online marketing amid a large-scale social restriction policy that still applies in DKI Jakarta, Monday (1/6/2020).

JAKARTA, KOMPAS – Restrictions on people’s movement and physical distancing requirements during the Covid-19 outbreak have partially shifted economic activity from the office and the factory to the home. This shift has created new habits and pushed the emergence of a home-based economy that may become a key driver of the economy.

Several institutions call this phenomenon the “stay-at-home economy”. Trends that have emerged from it include accelerated digital adoption, online shopping and working, studying, exercising and seeking entertainment at home.

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In its report titled “Consumer Behavior: New Normal after Covid-19: 30 Predictions”, research agency Inventure cited the stay-at-home lifestyle as a “megashift” in consumer behavior. Inventure managing partner Yushowady said on Friday that changing consumer behaviors had made homes a hub of economic activities, both in supply and demand. “The stay-at-home economy has become a way for people to adapt in trying to drive the economy in a time of pandemic,” he said.

According to him, economic activities that demand physical presence are facing challenges during the pandemic, such as tourism and hotels, meetings and exhibitions, aviation and offline retail and shopping. On the other hand, economic activities with minimum physical contact are predicted to grow, including supply and delivery businesses, live broadcast, e-trade and buying and selling of goods, sports at home, media, telecommunications and pharmacy.

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KOMPAS/TOTOK WIJAYANTO

Tisen, who works for a micro, small and medium enterprise (MSME), puts the finishing touches on a life-size human anatomy model in Cinangka, Sawangan, Depok city, West Java, on Sunday (26/7/2020). In addition to being marketed through social media, teaching aids made from fiber are also marketed through word of mouth. The MSME producing the models was established in 2003.

Concern

Now, as the government has eased restrictions on people’s movement, the stay-at-home economy remains popular, especially as people are still concerned about catching Covid-19. The situation signifies that the home-based economy is here to stay.

Google’s report on people’s movement during the Covid-19 pandemic shows that movement trends in residential areas on 21 July 2020 had increased by 12 percent compared to baseline, namely the median value for a corresponding day in a week within the period of 3 January – 6 February 2020. In the same period, movement in offices had decreased by 23 percent, movement in public transportation had decreased by 36 percent and movement in retail and recreational centers had decreased by 18 percent compared to baseline. This shows that, despite the eased restrictions, people prefer to do their activities at home.

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Market research company Kantar said Indonesian consumers remained concerned over the so-called “new normal” despite the easing. A survey conducted from 9-19 June found that 46 percent of 4,159 respondents in an in-person interview expressed worry about going outside. This was an increase from 40 percent in interviews conducted from 4-8 June.

According to Kantar’s Covid-19 metrics of worries, the number of worried respondents increased from 43 percent in mid-March to 68 percent in mid-June. This signified that many more Indonesians chose to stay at home.

A survey by research agency McKinsey on 19-21 June predicts that Indonesian consumers’ shifting habits from doing things offline to online will stay for a long time, even after Covid-19.

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KOMPAS/IQBAL BASYARI

Residents of Medokan Ayu, Rungkut district, Surabaya, East Java, sort caisim mustard greens harvested from a hydroponic garden in Kampung Hydroponik, Surabaya, East Java, on July 9 (9/7/2020). Interest in urban farming has increased during the COVID-19 pandemic as it can be a source of income.

Of the study’s 726 respondents, 92 percent said they had tried new ways of shopping since the outbreak began. The methods vary, including 58 percent of respondents shopping online, 48 percent of preferring drive-thru or curbside pick-up and 37 percent switching to brands that prioritize product safety.

Some 71 percent of respondents said they would keep using delivery services to buy groceries after Covid-19, while 66 percent said that they would keep shopping online but use the curbside pick-up facility and 84 percent said that they would use restaurant delivery services.

This means that e-trade is a channel that allows sellers to keep reaching their customers and stay afloat.

Consumers’ shifting habit to doing things online is captured by micro and small business players by moving their businesses to online marketplaces. E-commerce company Blibli executive vice president of consumer goods Fransisca K Nugraha said that the number of sellers in Blibli had jumped 90 percent during the large-scale social restrictions in April from the same period last year. “This means that e-trade is a channel that allows sellers to keep reaching their customers and stay afloat,” she said.

Meanwhile, online marketplace giant Tokopedia external communications senior lead Ekhel Chandra Wijaya said that 94 percent of Tokopedia’s 8.6 million sellers were ultra-micro businesses. This was a 19.4-percent increase compared to 7.2 million sellers in January 2020.

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KOMPAS/TATANG MULYANA SINAGA

Asep Gunawan, 49, a screen-printing businessman, displays his paintings in the Muararajeun Sablon tourism village in Cihaurgeulis, Bandung city, West Java, on July 19 (19/7/2020). Such paintings have a higher sale value than ordinary screen-printing products.

Opportunity for MSMEs

Yushowady said that micro, small and medium enterprises (MSMEs) had the opportunity of using the “economy from home” momentum. However, business players must rely on digital technology, the main pillar that supports the economy from home. Among the simplest examples is offering and marketing products through instant messengers like WhatsApp, especially through groups.

Cooperatives and SME Minister Teten Masduki said that the stay-at-home economy provided ample opportunity for MSMEs’ growth. However, other than being connected to the digital ecosystem, MSMEs should also adapt and innovate to fulfil market demand.

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Restaurant owners, for instance, can use people’s online habits to shift their products from ready-to-eat foods to frozen, semi-finished or processed foods. They can also move to online marketplaces and delivery services.

Batik business owners in West Java and Central Java have also innovated. At the start of the pandemic, their sales plummeted. They captured the available opportunities and recovered by producing pajamas, shorts, sportswear and unique loungewear, demand for which has increased.