Indonesian SMEs face obstacles in digitisation drive

Infrastructure and cost issues are hindering the efforts of SMEs trying to go digital, said the Indonesian government.
By: | July 8, 2020
Topics: Digital Transformation | Hybrid Working | Indonesia | Leadership | News | Restructuring

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.

READ: SMEs in Indonesia set to play bigger role in business supply chain

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.