I

magine what a customer can do with an online catalogue comprising millions of vendors.

With over 50 million active small and medium enterprises (SME) in Indonesia, the government has realized that businesses can only grow further with intensive promotion and continuous market expansion.

In an effort to connect this particular sector with potential customers through an e-commerce platform, the government has teamed up with online SME promotion service Nurbaya Initiatives to explore new ways to encouraging SMEs to tap into the digital era’s potential.

Nurbaya’s CEO and cofounder Andy Sjarif noted his disappointment at the fact that out of the Rp 200 trillion (US$15 billion) retail transactions involving SMEs last year, only 5 percent came from online sales.

To address this dismal statistic, Nurbaya is targeting to bring 2 million SMEs online within the next two years with support from state-owned postal company PT Pos Indonesia. The partnership will help SMEs strengthen its online presence to boost transactions, with Nurbaya providing technical support to set up online stores and Pos Indonesia in charge of logistics.

“By our collaboration with the postal service, SMEs would have the help in terms of the logistics and quality control. What we do is that we would send out e-mail alerts to our participating SMEs regarding a customer’s need for a product,” Andy said last week in an event.

According to Nurbaya’s website, a participating SME will be paired with a facilitator to provide advice on online promotion strategy, including the setup of online stores and payment platform. Nurbaya will also assign a so-called relationship manager to manage every online shop, allowing clients to focus on production.

Andy explained that the digital divide that exists between SMEs was now simply too wide to address merely using digitalization workshops, given the fact that many tend to focus more on sales rather than digitalizing their business.

The collaboration with Pos Indonesia will work similarly to how ride-hailing apps work, as SMEs that sell a specific product would be alerted and customers can make their choice through the e-kiosks available at approximately 4,000 Pos Indonesia outlets.

Within the Nurbaya ecosystem, Andy expects to see each client to make an average revenue of Rp 90 million per three months.

“This initiative will also help in terms of quality control, as customers are able to control that aspect themselves. Not even large online marketplaces are able to fully oversee quality because they don’t own the products [they sell]. We need to resolve that issue first,” he added.

The government is targeting 8 million SMEs to go online by 2018.

Communications and Information Minister Rudiantara said the goal was achievable, but the productivity factor had to be considered as well, as SMEs’ productivity rates differed whether or not they received digital training.

He also underlined that many Indonesian SMEs still did not see the internet as an important factor of development, but relied more on instant messaging services to
conduct their business. While this is an example of an online to offline transaction, its impact is not as effective as having their operations fully online.

“As much as the PT Pos Indonesia and Nurbaya initiative is concerned, it proves that e-commerce does not necessarily have to be purely online. It can be conducted in an online-offline basis. The main thing to pay attention to now is to continue shifting the mind-set of the public toward e-commerce and its different variations,” he said.