In collaboration with the ARISE+ Indonesia, the Directorate General of National Export Development (DG NED), Ministry of Trade, published a study 'The Opportunities Offered by e-Commerce for MSMEs in Global e-Marketplaces' during an online workshop on Monday (23/08).
The study assessed the top global e-marketplaces for five priority products, including food (nuts, fruits, coffee, tea, and spices), handicraft, apparel, footwear and furniture. The study also provided information on the e-commerce platforms' conditions and analysis on the readiness of Indonesian MSMEs to sell on those e-marketplaces.
The digital economy in Indonesia is witnessing prominent growth over the past few years. Indonesia's young population, high internet penetration, and the growing middle class are the main drivers of its e-commerce growth. The COVID-19 pandemic has also pushed the acceleration of Indonesia's digital transformation even faster.
As of the second quarter of 2021, Indonesian e-commerce transactions had earned Rp186.8 trillion (almost US$13 billion), increasing 63.4 per cent from last year, according to the Trade Ministry data. It is predicted to increase 48,4% year-over-year (YoY) and garner proceeds of IDR 395 trillion (over US$27 billion) by the end of 2021.
"The digital economy, especially e-commerce, has great potential and opportunities in promoting inclusive economic growth and development," the Director-General of National Export Development, Mr Didi Sumedi, said during his opening remarks.
Micro, Small and Medium Enterprises (MSMEs) formed the backbone of Indonesia digital economy. MSMEs account for 99% of Indonesia's total active enterprises, 97% of total employment, but only 60% of national GDP and investment. Enabling more MSMEs to harness digital technology's potential could help them expand into foreign markets using e-commerce, thus increasing their participation in global trade.
"The inclusion of MSMEs into the digital trade is a solution to help and encourage MSMEs to adapt amid the Covid-19 pandemic," Mr Sumedi added.
The study aimed to enhance the institutional capacity of the private sector and trade associations in trade facilitation by raising awareness of the opportunities offered by e-commerce for Indonesian MSMEs. The study, and the methodology it contains, could be used as guidance for both the public and private sectors in assessing the opportunities that international trade offers and how to realise those via e-commerce.
The study also looked at the challenges that the MSMEs faced in tapping the global market via e-commerce. High shipping costs, marketing skills, high registration fees for cross-border e-marketplaces for SMEs, and preparedness for cross-border e-commerce are among the barriers most reported by the MSMEs.
Key recommendations to enhance MSMEs participation in e-commerce included improving MSMEs readiness, managing some of the policy and infrastructure gaps, and strengthening the role of the Indonesian Trade and Promotion Centre (ITPC) in providing up-to-date information for MSMEs.
In response to the study recommendations, the Director of Export Development Cooperation, Marolop Nainggolan, stated during his closing remarks that government would continue building cooperation and collaboration with various stakeholders to enhance e-commerce development.
"By leveraging our facilities and infrastructures, we will provide opportunities for MSMEs to better access e-marketplaces through our regional or international events," Mr Nainggolan said.
Almost 200 representatives from the Ministry of Trade, the Coordinating Ministry for Economic Affairs, Ministry of Industry, Ministry of Cooperatives and MSMEs, trade attaches, Indonesian Trade and Promotion Centre, business associations and MSMEs participated in the workshop.
One of the participants from a small ecoprint apparel company commented on the study. "It's a very insightful study. It provided us with a solid foundation to go digital," Arief Jatinugroho, the Chief Operating Officer of House of Distraw, said after the workshop.
###
For further information please contact:
The Directorate of Export Development Cooperation
Directorate General of National Export Development
Ministry of Trade of the Republic of Indonesia at This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it.
The study assessed the top global e-marketplaces for five priority products, including food (nuts, fruits, coffee, tea, and spices), handicraft, apparel, footwear and furniture. The study also provided information on the e-commerce platforms' conditions and analysis on the readiness of Indonesian MSMEs to sell on those e-marketplaces.
The digital economy in Indonesia is witnessing prominent growth over the past few years. Indonesia's young population, high internet penetration, and the growing middle class are the main drivers of its e-commerce growth. The COVID-19 pandemic has also pushed the acceleration of Indonesia's digital transformation even faster.
As of the second quarter of 2021, Indonesian e-commerce transactions had earned Rp186.8 trillion (almost US$13 billion), increasing 63.4 per cent from last year, according to the Trade Ministry data. It is predicted to increase 48,4% year-over-year (YoY) and garner proceeds of IDR 395 trillion (over US$27 billion) by the end of 2021.
"The digital economy, especially e-commerce, has great potential and opportunities in promoting inclusive economic growth and development," the Director-General of National Export Development, Mr Didi Sumedi, said during his opening remarks.
Micro, Small and Medium Enterprises (MSMEs) formed the backbone of Indonesia digital economy. MSMEs account for 99% of Indonesia's total active enterprises, 97% of total employment, but only 60% of national GDP and investment. Enabling more MSMEs to harness digital technology's potential could help them expand into foreign markets using e-commerce, thus increasing their participation in global trade.
"The inclusion of MSMEs into the digital trade is a solution to help and encourage MSMEs to adapt amid the Covid-19 pandemic," Mr Sumedi added.
The study aimed to enhance the institutional capacity of the private sector and trade associations in trade facilitation by raising awareness of the opportunities offered by e-commerce for Indonesian MSMEs. The study, and the methodology it contains, could be used as guidance for both the public and private sectors in assessing the opportunities that international trade offers and how to realise those via e-commerce.
The study also looked at the challenges that the MSMEs faced in tapping the global market via e-commerce. High shipping costs, marketing skills, high registration fees for cross-border e-marketplaces for SMEs, and preparedness for cross-border e-commerce are among the barriers most reported by the MSMEs.
Key recommendations to enhance MSMEs participation in e-commerce included improving MSMEs readiness, managing some of the policy and infrastructure gaps, and strengthening the role of the Indonesian Trade and Promotion Centre (ITPC) in providing up-to-date information for MSMEs.
In response to the study recommendations, the Director of Export Development Cooperation, Marolop Nainggolan, stated during his closing remarks that government would continue building cooperation and collaboration with various stakeholders to enhance e-commerce development.
"By leveraging our facilities and infrastructures, we will provide opportunities for MSMEs to better access e-marketplaces through our regional or international events," Mr Nainggolan said.
Almost 200 representatives from the Ministry of Trade, the Coordinating Ministry for Economic Affairs, Ministry of Industry, Ministry of Cooperatives and MSMEs, trade attaches, Indonesian Trade and Promotion Centre, business associations and MSMEs participated in the workshop.
One of the participants from a small ecoprint apparel company commented on the study. "It's a very insightful study. It provided us with a solid foundation to go digital," Arief Jatinugroho, the Chief Operating Officer of House of Distraw, said after the workshop.
###
For further information please contact:
The Directorate of Export Development Cooperation
Directorate General of National Export Development
Ministry of Trade of the Republic of Indonesia at This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it.
