November 10, 2022 3:48 pm || By

CfDS’ Youtube Channel, November 3rd, 2022 – Digital transformation is continuously being practised in various fields, and one of those fields include the economics. As an aftermath of the COVID-19 pandemic, economic digitization is still being promoted. Due to the fact that it provides many benefits for economic growth and development. Economic actors who also got impacted are MSMEs. The Center for Digital Society – through Difussion #82 – held a discussion entitled “Digitalization Strategy to Advance Indonesian MSMEs”, to discover various potentials, opportunities, and challenges that will be faced by MSME actors in Indonesia when facing digital transformation. CfDS Research Interns – Ismada Firdaus M. P. and Aurelia Nareswari – participated in Difussion #82. The discussion was moderated by M. Alfasya Syabil S., as the CfDS Intern Partnership. Diffusion #82 can be accessed again via https://www.youtube.com/watch?v=T7RD5M38xSU.

Africa as an Alternative Potential Market for Indonesian MSME Export Activities

The discussion began with a presentation from Ismada Firdaus M. P., in which Ismada started the conversation through an analysis of the economic potentials in the African continent – ​​If Indonesia is interested in expanding its MSME market globally. The African continent is a very potential market for Indonesian MSMEs to be able to grow internationally, because Africa has been collaborating a lot with Indonesia. 43% of the  population on the African continent are active internet users, and now there are more than 5000 companies on the African continent that have been digitised. The Indonesian government has tried to explore these potentials through various collaborations with the African continent, such as the Indonesia-Ethiopia Business Connect and Soko la Indonesia programs. It is hoped that the programs from the Indonesian Embassy can be a stimulant, and MSMEs in Indonesia are increasingly encouraged to digitise their businesses; In order for them to reach the global market.

Even so, the main challenges that will be faced by Indonesian MSMEs today are administration and marketing capabilities. “Many MSMEs in Indonesia do not yet have legal requirements as MSMEs or even exporters. There are also many of them who are not skillful yet at marketing their products digitally”, quoted from Ismada.

Digital Platform for MSME Development in Indonesia: Challenges and Opportunities

In Indonesia, economic digitization has been driven by the availability of various e-commerce platforms; That can support the operation of MSMEs. The government, even before the COVID-19 pandemic, had encouraged MSME players to go digital; One of them is by initiating the Gerakan Nasional Bangga Buatan Indonesia program (e-commerce training), and so on. The government provides solutions to solve MSMEs stagnation during the pandemic through collaboration with various e-commerce platforms; To help the MSMEs. In 2018, e-commerce platforms have succeeded in attracting millions (up to more than 4.5 million) users, including MSME actors.

Digitization can provide opportunities for MSMEs. These days, many people are using digital money (e-banking and e-wallet). Digital marketing (via social media) is also much more effective than conventional marketing, and is able to significantly increase the profits of the MSMEs. However, the majority of MSME product marketing in Indonesia is still done conventionally, not digitally. The main problem in the lack of digitization of MSMEs in Indonesia is incompetent human resources; Including the social divide and the digital divide. “The digitization of MSMEs needs to be accompanied by an understanding of market analysis that is right on target”, as Aurelia concluded – to end her discussion.

Writer: Allysa Putri Rendry
Editor: Ayu Pratiwi