Business operations during the pandemic

  • New research shows that e-commerce has increased Indonesia’s resilience to small businesses during the Covenant era.
  • Online businesses are more likely to survive the epidemic, and their profits are rapidly increasing.
  • Small businesses and entrepreneurs need other forms of assistance, including financial support and training.

Many new market economies are at war with Covide-19, although there have been improvements in vaccines. Indonesia is no different. Indonesian Micro, Small and Medium Enterprises (SMEs) E.E.E.E.E.E.E.E.

Our research shows that one way to help Indonesian entrepreneurs do this is through e-commerce. A.D. In December 2020, the World Bank – in partnership with Shophi – surveyed more than 15,000 digital traders in Indonesia. After joining the forum, they all made 30 or more transactions. SME, which has less than $ 50 billion in annual sales revenue, is expected to grow in 2019. The survey asked respondents about the impact of the epidemic on their business and performance, how they managed the epidemic, and what government and businesses have found and want to receive.

Key findings about e-commerce

One of our key findings is that digital merchants are more resilient to the Covenant-19 epidemic compared to companies that operate mainly offline businesses. When the epidemic first hit Indonesia in March, 80 percent of the digital traders surveyed opened their businesses by 2020. This amount is much higher than offline organizations. Less than a dozen of them opened their businesses..

Businesses at the time of the outbreak

About 80% of the digital merchants’ businesses were open to the whole business.

Image World World Bank

By the time the outbreak took place, not only had digital entrepreneurs been able to keep their jobs better, but their businesses had also improved rapidly. On average, total sales of digital merchants rose to the pre-epidemic level about six months after the first major case in Indonesia. By this time, most of the offline companies were still facing them. Decreased annual sales by more than 20 percent. Organizations that have previously invested in digital adoption are rapidly recovering, including those that already use, or use the Internet, social media, special applications, or digital platforms.

Many factors may explain why digital merchants were stronger: the sectors in which digital merchants operate; Ability to work with only a few employees due to their technological nature; And the fact that it can be accessed by customers across the country.

Our analysis confirms that e-commerce was an important source of revenue for many new traders during the outbreak. In Indonesia, 25 percent of all entrepreneurs started working online only during the epidemic. Perhaps they are motivated by the need to start a business. Our research shows that new merchants use more e-commerce revenue than their original income compared to existing merchants.

There are some differences between these new vendors and traditional MSMEs. Young people (15-24 years old), female students and female part-time employees are more likely to be “newcomers” to e-commerce. E-commerce has become a major breadwinner between 2019 and 2020 and has made e-commerce a major source of revenue for existing sellers’ families.

Covid Response Alliance is a coalition of 85 world leaders hosted by the World Economic Forum for Social Entrepreneurship. The mission is to reach out to the key first responders to the epidemic and to support social entrepreneurs everywhere as pioneers of green, inclusive economic realities.

His CVED Social Enterprise Action Plan outlines 25 concrete recommendations for key stakeholders, including financiers and philanthropists, investors, government agencies, support organizations, and corporations. A.D. In January 2021, the members launched the 2021 roadmap, in which members will develop 21 action projects in 10 sectors. Including organizational access and policy change to support the social economy.

See the Alliance website or “Impact History” for more information over here.

It also provides low-cost ways for e-commerce merchants to adjust their product mix every time a pandemic occurs. Of the 15,000 traders in the study, 40 percent changed their products and 17 percent increased their production. Not surprisingly, health products were the most popular category during the outbreak.

As they were able to change product categories, more diversified merchants were more likely to have stronger sales, and they were better able to cope with the epidemic. This is after controlling other factors such as business size, online share, number of years sold online, product category and overall e-commerce platforms.

While e-commerce is an important way for Indonesian entrepreneurs to survive the recession, they need the help of both the public and private sectors to achieve their full potential. One in five digital traders surveyed received government assistance, mostly in cash. These remittances have helped traders in their business, household consumption and savings, and female traders are more likely to be financially secure than men.

In the medium and long term, the largest share of the 15,000 entrepreneurs surveyed (23%) is in the area where digital skills training is most needed. They also demanded sales and marketing as well as low-cost and reliable logistics training.

What are the three most important programs for the future?

About 25 percent of the participants in the study said digital skills training would be their number one priority.

Image World World Bank

In the future, more general public-private partnerships will be needed to guide digital entrepreneurs in the future of Indonesian MMMs. Creating a Inclusive Growth in the Digital Economy in Indonesia It requires other additional interventionsIntroduce the provision of digital financial services such as logistics development and digital payment services.

The World Bank’s CV-19 digital trader survey is part of that. World Bank Covide-19 Observer Project.