Digitalization Helps MSMEs Survive

Encouraging MSMEs to enter the digital ecosystem is not easy. Procuring the digital technology amid the Covid-19 pandemic is a big challenge for MSME owners. Most MSME owners are still unfamiliar with digital platform.

KOMPAS/TOTOK WIJAYANTO

Visitors look at pearl jewelry during an exhibition of superior products for micro, small and medium enterprises (MSMEs) BaliNusra (Bali, Nusa Tenggara) at Grand Indonesia Mall, Jakarta, Thursday (25/3/2021). The exhibition, which was held online and offline, was attended by 20 MSMEs producing cloth, coffee and tea, as well as craft products typical of Nusa Tenggara and Bali.

JAKARTA, KOMPAS — Micro small and medium enterprises (MSMEs) that use digital technology to sell their products and services online are generally able to survive during the Covid-19 pandemic. However, they still have a problem with technology penetration and human resource capacity.

One of the surveys that highlighted the condition of MSMEs during the Covid-19 pandemic was the Grow with Google Impact study conducted by Google and Kantar. The survey was conducted on 1,571 MSMEs who participated in the Gapura Digital and Women Will training program provided by Google. The survey was conducted in April-June 2021.

Google Indonesia’s product marketing manager Dora Songco said during a press briefing on National MSME Day in Jakarta on Thursday (12/8/2021) that 26 percent of respondents stated their businesses were relatively more sustainable during the pandemic after taking part in the Gapura Digital and Women Will training program. About 80 percent of them gained more customers and 13 percent others saw an increase in revenues.

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Among the women respondents, the results were even better, with 30 percent of them saying they were able to survive after switching their business online, with 23 percent having a positive financial impact, and 6 percent being able to grow the business.

Dora explained that the "survival" in the survey meant that the MSME businesses did not go out of business. After taking part in the digital marketing training, they shifted their offline sales to online so that they were still able to run their business during the pandemic, she added.

“We have yet to make a detailed survey on the development of the MSME businesses that we have trained. However, in some cities where we hold the training program, a number of MSMEs have success stories in selling online after participating in the training,” said Dora.

Kompas/Priyombodo

Desi packs bag and wallet products that are marketed online through digital markets or marketplaces at her kiosk in the Tanah Abang area, Central Jakarta, Monday (30/11/2020). Desi admits that promotions in the digital market can increase online sales. In a day he is able to sell around 400 bags and wallets through the digital market.

Meanwhile, Vice President Ma\'ruf Amin said during the virtual commemoration of the 2021 National MSME Day on Thursday that the digitization of MSMEs was unavoidable during the Covid-19 pandemic. However, he said that to be able to enter the digital world, MSMEs needed to increase the capacity of their human resources and there needed to be more supporting market access policies.

To fulfill the two requirements in pushing the digitization drive, namely an improvement in the capacity and supporting market access policies, a joint commitment is needed to foster and assist MSMEs. Thus, productivity and product quality can be increased.

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"In addition, there should be a commitment to mentoring and developing MSMEs, especially MSMEs with export potential such as by providing financing facilities, as well as establishing a partnership with big businesses," said Vice President Amin.

Big challenge

On the same occasion, Cooperatives and SMEs Minister Teten Masduki said the commemoration of National MSME Day should be used as an opportunity to further strengthen the commitment in empowering MSMEs, 99 percent of which were micro and small-scale companies.

Based on data from the Cooperatives and SMEs Ministry, as of June 30, only 2.6 million SMEs have been recorded in the Online Single Submission (OSS) business registration system. The proportion of MSME loans in May 2021 totaled only about Rp 1 quadrillion, relatively small compared to the total loans disbursed to business players, which reached Rp 5.576 quadrillion.

KOMPAS/SEKAR GANDHAWANGI

Online discussion "Let\'s Sell Online", Wednesday (17/3/2021). This discussion discusses the importance of MSMEs adopting technology for their business. Google notes that technology-based businesses\' revenue is growing 80 percent faster than conventional businesses.

The number of MSMEs that have entered the digital ecosystem only totaled 14.6 million companies, accounting for just 22 percent of the total. In addition, the implementation of the public activity restrictions in the second quarter of 2021 also put pressure on MSMEs.

Unfortunately, encouraging MSMEs to enter the digital ecosystem is not easy. Procuring the digital technology amid the Covid-19 pandemic is a big challenge for MSME owners. In addition, most MSME owners are still unfamiliar with digital platforms.

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The head of the New Retail Department at Tokopedia, Karina Susilo, said in a digital press conference that the biggest challenge for MSMEs today was mostly related to market penetration. According to him, many MSME owners did not know how to use mobile phones to market their products.

"It is necessary to accelerate the adoption of digital platforms for traditional businesses such as shop owners, grocery stores and other similar businesses, so they can sell their products online," said Karina.

This article was translated by Hendarsyah Tarmizi.