Indonesian SMEs face obstacles in digitisation drive

The sooner SMEs in Indonesia can complete their digital transformation, the greater boost it will provide to the country’s efforts to recover economically from COVID-19.

For SMEs themselves, going digital will enable them to access a wider market and keep themselves in business during the pandemic, suggested Teten Masduki, Indonesia’s minister for Cooperatives and SMEs.

He reported that only 13% of SMEs in Indonesia, or around 8 million, have gone digital, with the government aiming to have 2 million more do so by 2020. Some of the issues facing SMEs trying to go digital, the minister reported, included unstable Internet connection and high Internet costs.

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Despite these hurdles, it would appear that more SMEs in Indonesia are embarking on the road to digital. A recent survey of 2,200 business owners conducted by Sea Insights found that 50% of business owners increased their use of social media, e-commerce and online learning during COVID-19.

45% of SMEs revealed that they are actively selling their products on e-commerce platforms, with about 70% indicating a willingness to continue utilising e-commerce and social media to sell their products.

For those who have had to work from home, 63% identified the difficulties of remote working as, an unstable Internet connection, high Internet costs and the inability to have physical interactions with consumers.