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Igniting the Spirit of Merdeka: Local Pride and E-Commerce Adoption by Indonesian SMEs

August 16, 2021

Entering the month that commemorates Indonesia’s independence, the government has imposed tightened regulations through community activities restrictions (PPKM) in several regions as the nation continues to fight the long battle against the COVID-19 virus.1 The restraint which initially took place until late July has been extended to curb the spread of the virus, further prolonging the limitation on people's physical mobility and livelihood activities. Notably, for people working in non-critical sectors, this continuation has put their jobs and businesses on the threshold.2

At large, the pandemic has long disrupted domestic economic resilience on all scales, especially SMEs. In a survey conducted by Bank Indonesia, 87.5% of SMEs are affected by the COVID-19 pandemic, with 93.2% of them admitting that it negatively impacted their sales.3

In the spirit of stronger nationalism, the Indonesian government launched a movement namely #BanggaBuatanIndonesia (take pride in local products) in 2020,4 encouraging the public to “shop at small, micro, and ultra micro businesses and buy Indonesian-made products." 5

The government’s efforts within the movement entailed successfully onboarding 3.8 million SME players to the digital platforms within a year.6 Despite this, Indonesia's mission to bring more SMEs to go digital is still underway. As the Minister of Cooperatives and SMEs of The Republic of Indonesia, Teten Masduki, revealed, the government is currently targeting 30 million SMEs to be connected online by 2024.7 With the #BanggaBuatanIndonesia movement proceeding onto its second year,8 the movement calls out more stakeholders to participate; SME players, marketplaces, the government, and Indonesian citizens.9

The pandemic seems to provide a glimpse of the future world where digital is at the center of every interaction, hence, encouraging companies to accelerate digital transformation.10 From a business standpoint, digital transformation can support companies in optimising their sales performance, expanding customer reach, and increasing brand effectiveness and productivity.11 However, in the digital realm that’s almost limitless, competitive branding and sustainable sales management have become crucial survival skills for SMEs to own.12

Various players within the e-commerce industry, such as marketplaces, logistics partners, payment gateways, and local brands all have their own unique roles in helping SMEs to maximize their potential through going digital. As a technology and services company offering solutions for brands to sell online in Indonesia, SIRCLO Store now offers a free subscription for SMEs’s online store management, while working with the government to circulate training modules for its dashboard usage to SMEs facilitators (train the trainer).13

Through our SIRCLO Store solution created to help SMEs sell across multiple selling channels at ease (website, marketplaces, chat commerce), we've discovered how local brands/SMEs have brought more meaningful values into their business and survived amid the pandemic “in style”; not just simply maintaining operations, but also keeping their brand identity alive and visible.

In the spirit of Independence Day, allow us to share the meaningful values SIRCLO Store’s users have brought forth and how it extends the substantial feeling of local pride into real impact for the nation as a whole.

Introducing Indonesian craftsmanship to local and international markets, one art at a time

There are many ways that business owners can do to present goods that are both unique and special, one of which is by giving a personal touch to each product through craftsmanship. Handicraft products are famous for their own added value, with each stroke reflecting the artisan's skills and characteristics. By establishing their respective attributes, handicrafts have now enlivened the creative economy industry, even becoming the third-highest creative economy sector that contributes to Indonesia's GDP.14

According to the Ministry of Tourism and Creative Economy (Kemenparekraf), the success behind Indonesian craft products in winning the customers’ hearts is based on its two primary purposes, namely as arts (aesthetic) and applied objects.15 As a local brand that focuses on creating goods through handicrafts, NEMA Kids doesn't only produce high-quality furniture and toys for children but also offers versatile designs with its own artistic values.

Aspiring to attract customers from all over the nation, NEMA Kids utilizes online platforms such as social media, marketplace, and brand(dot)com webstore powered by SIRCLO Store to market their product from the get-go. This is in line with catering to the many mothers who are starting to shop online for their children’s needs, as Orami’s findings indicate that 50% of mothers agreed that they shop Mom & Baby products through e-commerce more often than before.16

Bringing a touch of youth and color to Indonesians’ everyday look

In recent years, beauty trends that have long been centering towards specific standards are slowly becoming more open with diversity, as more brands begin to support and prolong this inclusivity. Taking part in that, WCKD seeks to become a cosmetic brand to make modern women feel good about themselves by offering compact and high-quality products.

WCKD has been running its business entirely online since its establishment by integrating various sales activity features, such as WhatsApp and digital ads, into their online webstore powered by SIRCLO Store. With beauty industry players expected to prioritize digital channels to capture and convert customers' attention in the pre-COVID-19 era, more beauty brands are expected to go online.17 In response to the current pandemic situation, WCKD expressed that “Fellow brands need to help each other and establish a healthy competition within ourselves. I think it's best if we could collaborate and work together.”

Turning typical raincoats into fashion statements with stunning colors and designs, AME Raincoat offers rainwear essentials that are suitable for millennials' needs. Started out as a college assignment, Bima and Mirza (Owners of AME Raincoat) decided to revamp their project into a profitable business and establish the brand in 2018. Their sense of responsibility as design graduates gets them to pay close attention to each product's quality, characteristics, and visual aspect. Despite having histories with concept stores in Jakarta and Bandung, AME Raincoat's selling activities remained fully online.

Like AME Raincoat, the younger generation's potential in establishing local brands needs to be closely followed by the industry players. With a 3.47% entrepreneurship ratio, Indonesia still needs to increase the domestic entrepreneurs' to 4.00% at minimum,18 as stated by the Minister of Cooperatives and SMEs of The Republic of Indonesia, Teten Masduki.

With Indonesia’s is only expected to reach 3.9% in 2024,19 more concrete steps are increasingly needed to accelerate the growth of domestic SMEs, one of them by empowering the young generation of aspiring entrepreneurs. President Joko Widodo himself has been optimistic about the younger generation's potential, considering their status as digital natives who are familiar with the technology.20

Empowering Local Manpower: A version of “keeping it in the family"

Working closely with local cow & goat farmers, almost 98% of the raw materials used to make Rosalie Cheese’s products are locally made. Including their delicious natural snacks, the secret behind their premium-quality products lies in the great people behind them. From unskilled women in the neighborhood, Rosalie Cheese hired them to become professional cheesemakers.

Not only ensuring that every employee gets proper training before stepping into the kitchen, but this homemade business also makes sure that their products originate from natural raw materials at all times. With the growing trend of healthy food for the past two years, Rosalie Cheese is now gaining more attention from the public, who later become their customers.

Apart from concentrating on the business' sustainability, a lot of business owners also pay attention to how their business can create a social impact for society at large; these people are called 'sociopreneurs’.21 As a sociopreneur brand, Mendekor aims to foster a sense of love toward local products, and at the same time, prosper the life of every artisan behind it. Offering high-quality interiors at affordable prices to customers, Mendekor has joined hands with more than 30 artisans in 9 cities in Indonesia. As a form of reciprocity to nature and humans, their brand is actively involved in various social activities, such as planting mangroves and building a Reading Garden (Community Library) in NTT.

Parting Words

By presenting high-quality products with a touch of local authenticity, not only can independent businesses stand out in a crowd of competitors, but they're also able to diffuse their brand's uniqueness into their customers' identity and lifestyle. These six brands have been able to utilize their online platform to the fullest, not only for business operations but also for solidifying their identity in the digital realms and customers’ minds.

To support the government’s #BanggaBuatanIndonesia movement, players within the e-commerce industry need to show their support by contributing through their respective roles. As one the players in e-commerce industry today, SIRCLO aims to assist SMEs on digital onboarding and business continuance through SIRCLO Store, with its online store management tool and training modules.

Happy Independence Day, Indonesia!

To all eager generations, begin your independence journey by bringing your business idea come to life with an Independence Day gift from us to you: sirclo.com/merdekajualanonline

Let’s #GrowInfinitely together!

Disclaimer

SIRCLO neither provides regulated advice nor guarantee results. The materials we convey reflect general insight and best practice based on information currently available, and do not contain all of the information needed to determine a future course of action. Such information has not been generated or independently verified by SIRCLO and is inherently uncertain and subject to change. SIRCLO has no obligation to update these materials and makes no representation or warranty and expressly disclaims any liability with respect thereto.

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