Virtual Trade Bridge

KOMPAS/TOTOK WIJAYANTO

A worker paints the body of an aircraft miniature at the Anglo Aircraft Model workshop in Cibinong, Bogor, West Java, on Monday (12/10/2020). The company belonging to Marison was one of the customers of lender Mandiri Syariah that received financial assistance as part of the national economic recovery program for micro, small and medium enterprise (MSME). Employing 25 workers, the MSME, established in 1990, can produce 200 aircraft miniatures each month, sold for Rp 250,000 to Rp 50 million each depending on size and difficulty. Its customers are commercial and cargo airlines in Asia, Australia and Europe.

In the midst of the Covid-19 pandemic, digital technology in the form of virtual and online trade is a solution. It’s a solution for players in micro, small and medium-sized businesses, even small to large industries and MICE service providers to keep their “kitchen” running, as well as drive the national economy. Virtual exhibitions have become a trade bridge and help strengthen the national creative economy.

The Covid-19 pandemic has stagnated trade in goods and services. Service buyers and service traders cannot meet, let alone make transactions directly. Exhibitions that bring in buyers, investors and even tourists are also affected.

The World Trade Organization (WTO) in its latest report on 6 October 2020, said that global trade had begun to show signs of recovery from the effects of the pandemic. However, to return to normal conditions, it will take longer because Covid-19 has not subsided.

The WTO estimates that the growth of world trade volume in 2020 will decline by 9.2 percent. This projection is better than the forecast in April, which said global trade volume would contract by 12.9 percent.

The WTO also predicts that in 2021, global trade will grow by 7.2 percent. This projection is lower than last April, which was predicted to grow 21.3 percent. However, the WTO stressed that the level of uncertainty of this prediction is very high because it depends on the development of the pandemic and efforts to deal with it in each country.

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Not only the trade sector, one of the conventional bridges of this sector, namely the meetings, incentives, conventions and exhibitions (MICE) service industry, has also collapsed.

In Indonesia, for example, the Indonesia Event Industry Council (Ivendo) estimates that the projected loss of 1,218 MICE service providers due to the Covid-19 pandemic is Rp 2.69 trillion to Rp 6.94 trillion. About 96.43 percent of events in 17 provinces were postponed and 84.2 percent of other events were canceled. Not to forget, around 90,000 workers in this sector also lost their jobs.

In fact, the MICE service industry is quite important. In addition to opening up market opportunities for business and industry players, MICE usually also brings in businessmen or foreign tourists who have the potential to make business trips.

The International Congress and Conventions Association (ICCA) in 2018 noted that the spending of MICE tourists averaged US$2,000 (around Rp 29.5 million) per person per day with an average stay of five days.

In 2014, the Global Business Travel Association (GBTA) calculated that US$1.18 trillion or about 50 percent of world tourism transactions were business trips. The International Congress and Conventions Association (ICCA) in 2018 noted that the spending of MICE tourists averaged US$2,000 (around Rp 29.5 million) per person per day with an average stay of five days.

The contribution of the MICE industry in Indonesia to gross domestic product (GDP) is also quite large. Data from 2018 Global Economic Significance of Business Event states that the contribution of the MICE industry in Indonesia is US$3.9 billion to national GDP. This value puts Indonesia in 17th place out of 50 countries.

In the midst of this pandemic, digital technology in the form of virtual and online is a solution. It’s a solution for players of MSME, small to large industries, as well as MICE service providers to keep their "kitchen" running as well as drive the national economy.

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Various virtual exhibitions were held this year, such as Indonesia Franchise, License and Business Concept Expo and Conference (IFRA), Trade Expo Indonesia-Virtual Event (TEI-VE), Pertamina SMEXPO, Indonesia Property Expo, Mobil123 DRIVE Virtual Expo, and Virtual Indonesian Creative Works (KKI) held by Bank Indonesia (BI).

The Director General for National Export Development at the Trade Ministry, Kasan Muhri, said the Trade Ministry had familarized TEI-VE 2020 to Indonesian trade representatives in a number of countries prior to the official launch of the exhibition. Usually, international level trade fairs which are held once a year are held physically or conventionally.

Overseas buyers

According to Kasan, the transformation to virtual events becomes a strategic effort. Although virtual, the exhibition features online business forums and assessments. "Potential buyers from other countries will be presented online," he said.

KOMPAS/TOTOK WIJAYANTO

Taslam shows piggybanks made from gypsum at his studio and house in Makassar, East Jakarta, on Wednesday (14/10/2020). The COVID-19 pandemic has affected the sales of his business, which have dropped 50 percent. Previously, each day he could finish 200 piggybanks featuring cartoon characters, which he sold for Rp 7,500 each. Taslam said he had not received the Rp 2.4 million in financial assistance for MSMEs from the government.

The MSME virtual exhibition fostered by state-owned PT Pertamina or Pertamina SMEXPO 2020 which was held on 9-11 September 2020, for example, was dominated by overseas buyers. The exhibition with a transaction of Rp 9.3 billion was dominated by visitors from the US, Singapore, Malaysia, Australia, Netherlands, Saudi Arabia, Japan and Taiwan.

"The biggest sales are actually Hitara Black Garlic products, which are none other than processed garlic with a transaction value of Rp 2 billion. These products are in demand by buyers from England, France, South Africa and Australia,” said Pertamina\'s Vice President for Corporate Communication, Fajriyah Usman.

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Meanwhile, during the KKI 2020 Virtual Series I exhibition on 28-30 August 2020, micro, small and medium enterprises (MSMEs) earned Rp 4.86 billion in sales. In the exhibition driven by BI, a business meeting was held between 31 MSMEs and 16 potential buyers from Singapore, Italy, South Korea, Japan, China and Australia, as well as aggregators from Indonesia.

BI noted, during the period after KKI 2019 to KKI 2020 Virtual Series I, the value of business agreements (export sales, financing, and sales via e-commerce) increased 54 percent from the previous period.

"The commitment to the Rp 113.2 billion business agreement between

328 MSMEs and business partners is followed by the signing of export contracts and MSMEs credit agreements with financial institutions," said BI Communication Department executive director Onny Widjanarko.

Helping MSMEs

Virtual exhibits present a new method of activity with technology as its basis. Event promoters or organizers (EOs) and exhibitors have transformed (their way of doing business), be they in event management, booths, product visualization, as well as ways of interacting and transacting with prospective buyers.

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Cooperatives and Small and Medium Enterprises Minister Teten Masduki said that a virtual exhibition is a digital business event that can help MSMEs during a pandemic. Through virtual exhibitions, MSMEs can be motivated to rise up and be productive in seizing opportunities.

"They learn to adapt to new habits and run changing business patterns. This virtual exhibition also expands market access, both domestically and abroad, "he said.

The government, continued Teten, has provided rooms of training for digital transformation of the cooperatives and SMEs, namely the ID-XCOOP portal for cooperatives and the website www.edukukm.id for MSME players. In addition, there is also a MSME Foster Brotherhood program.

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Through this virtual exhibition, the creative economy sector will play an important role in the virtual exhibition. The competent workers/professions in the field of information technology (architects, website or product designers, software programmers, videographers, and application makers) will be absorbed by the market. In fact, virtual event organizers (VE) have started to appear, both new arrivals and transformed EOs.

PT Dyandra Promosindo convention manager Abynprima Rizki said technology has changed the system in event organization from conventional to modern. For example, the use of app or website for survey or registration of the participants or the use of barcode for tickets and as well as the use of financial technology app and smart bracelet for transaction. Not just that, technology also gives the MICE organizers asn ease in developing the concept of an event and to grab market.

“With technology, before the event kicked off, we can make a digital registration system to know the response from the target market. Thus, everything is measured clearly and precisely,” Teten said.

In other words, virtual event kills the taste and touch senses of the visitors and potential buyers.

Of course, in other hand, the conventional workers (stand attendants and sales person) can no longer join it. From the side of the visitors or potential buyers, they no longer have the experience to directly test, enjoy, touch and taste the products on display. In other words, virtual event kills the taste and touch senses of the visitors and potential buyers.

In the 2020 International Franchise, License & Business Concept Expo & Conference (IFRA) on 18-20 September, for example, the general manager of Dapur Serundeng, Irta Patta Romo, admitted that the exhibition felt bland because there was no direct interaction with potential clients. Usually, the Serundeng Kitchen crew immediately demonstrated the food products sold by the Jakarta-based culinary franchise in front of potential clients or potential buyers.

KOMPAS/FERGANATA INDRA RIATMOKO

A visitor holds a batik face mask featuring a relief of Borobudur Temple at Borobudur Batik House in Ngaran hamlet, Borobudur district, Magelang regency, Central Java, on Saturday (17/10/2020). For the past two months, the micro, small and medium enterprise (MSME), under UNESCO’s guidance, has shifted to producing face masks due to low demand for batik dresses. The batik making group with nine members sold the face masks for Rp 25,000 each. Each woman can produce 20 face masks a day.

There are also technical obstacles that sometimes arise during the exhibitions. The Dapur Serundeng crew also had difficulties because they were not familiar with the use of technology. A few months ago, Zoom, Google Meet and teleconference facilities felt far or remote from them.

However, Irfa admitted, if the mastery of technology has been grasped, virtual exhibitions have great opportunities in the digital era. Apart from eliminating the distance limit between the exhibitors and visitors of the exhibition, the holding of virtual exhibitions, especially for MSMEs with limited budgets, can also reduce marketing costs.

There are expectations arising from the virtual exhibition. This exhibition is expected to be a bridge that will revive economic opportunities for domestic and global trade when hit by a pandemic. Through virtual showrooms and taxation businesses, supported by the ease of online transactions, virtual exhibitions can create a market in the midst of a pandemic.

However, on the other hand, virtual exhibitions serve as a reminder that many workers and service providers in conventional exhibitions have lost their jobs. Many MSME actors are still not ready to take part in this event without support from various groups. (JUD/APO/ERK)