The market is quite large since Indonesia has the most users of e-commerce in Southeast Asia.
Jakarta (ANTARA) - Indonesia's digital market potential will reach US$124 billion, or around Rp1,700 trillion, by 2025, deputy for small and micro enterprises (SMEs) at the Cooperatives and SMEs Ministry, Hanung Harimba Rachman, has said.

"The market is quite large since Indonesia has the most users of e-commerce in Southeast Asia," he noted here on Thursday.

According to Trade Ministry data, Indonesian e-commerce transactions in 2020 reached Rp266 trillion, he said. Meanwhile, as of the second quarter of 2021, the number had reached Rp186.8 trillion – an increase of 63.4 percent, he added.

"We are expecting that the growth will be over Rp400 trillion in 2021," Rachman said.

Furthermore, the number of on-boarding micro, small, and medium enterprises (MSMEs) in the digital ecosystem have increased to 15.3 million, or 23.9 percent of total MSMEs, amid the pandemic, he informed.

However, he revealed that small businesses will face various challenges in future in terms of unfair business competition, cyber security, digital literacy, as well as the information and communication technology industry, which is still dominated by imported products.

Hence, the Cooperatives and SMEs Ministry is trying to encourage MSMEs actors to enter the digital ecosystem by strengthening the capacity and competitiveness of micro, small, and medium enterprises cooperatives (KUMKM) through the provision of collaboration networks as well as free business incubation and e-learning platforms, Rachman said.

Related news: Market digitalization involves digital platform, TV for market growth

The ministry is also preparing SMESCO – a brand of the ministry’s Cooperatives and SMEs Marketing Service Agency -- as a Center of Excellence for SMEs by providing an exploration and research laboratory for future small enterprises at SMESCO Labo, product curations at Sparc Trade, export assistance at BNI Xpora, business fostering companions at Sparc Campus, and collaboration with various MSME companion associations, he informed.

In addition, SMESCO is also providing logistics support innovations through fulfillment centers (consolidation of the logistics processing of MSMEs products), factory sharing, cloud kitchens, as well as SMESCO’s drop-shipping business platform Siren.id, he added.

“Through the SMESCO’s Center of Excellence, SMESCO is expected to be able to give solutions to any problems regarding market expansion, raw materials, human resources, data analysis, and logistics. I hope that various collaborations will continue to be carried out between ministries, agencies, SMESCO, local governments, State-Owned Enterprises, the private sector and all related stakeholders to build excellent MSMEs in future," Rachman said.

Meanwhile, president director of SMESCO Indonesia, Leonard Theosabrata, said that it has mapped the growth of various digital platforms comprising e-commerce, ride hailing, and digital payments in Indonesia.

Those platforms have helped Indonesia become the country with the largest and fastest digital economy in ASEAN in the past two years, he added.

Furthermore, SMESCO has fulfilled the five pillars of the microeconomic recovery acceleration approach through digital platforms that manage to reach customers, suppliers, back offices, data analytics, and logistics support, he said.

Related news: MSMEs encouraged to use digital tech to penetrate global market
Related news: East Java expects 27 thousand MSMES to enter digital market

Translator: Baqir Alatas, Uyu Liman
Editor: Suharto
Copyright © ANTARA 2021