A new research by global management consulting firm Bain & Company found that even though 87 percent of Indonesia’s SMEs are aware of e-commerce’s benefits, they are still reluctant to enter the fray.

The research — conducted in association with United States-based tech giant Google, Southeast Asia’s Sea Group and former secretary-general of the Malaysian ministry of international trade and industry Tan Sri Rebecca — also found that online sales in the country only accounted for 2 percent of total retail sales last year, a small percentage compared to the 12 percent in the United States and 20 percent in China during the same period.

The researchers surveyed over 2,300 SMEs across all 10 member states of ASEAN.

Bain & Company’s management consultant, Usman Akhtar, said in Jakarta on Tuesday that Indonesia had been lagging behind on the digital economy front compared to other Southeast Asian countries.

“SMEs face several major obstacles in their path to digital integration. One of them is the lack of knowledge and understanding of digital technology,” Akhtar added during a research presentation hosted by the Centre for Strategic and International Studies (CSIS), adding that 40 percent of the surveyed SMEs reported a lack of digital skills in their workforce.

According to the survey, those that have entered the online market booked higher profits than those that are still engaged in traditional businesses. Retail SMEs, which advertise and sell their products via online marketplaces, saw an average increase of 15 percent in sales each year.

Meanwhile, SMEs in the logistics industry, which regularly use digital tools, were able to improve productivity by 10 to 20 percent on average. Similarly, SMEs in the agricultural industry that use farming apps saw a 5 to 15 percent improvement in crop yields.

Haryo Aswicahyono, an economic researcher at the CSIS, said about 95 percent of SMEs, which are engaged in online retail businesses, have been able to tap into foreign markets thanks to the facilities provided by marketplace operators. “Only a few marketplaces such as Lazada and Elevenia have provided a system enabling the retailers to sell their products overseas.”

Among possible solutions to the issues, according to the research, were to increase the development of human resources and establishment of seamless digital payments.

Akhtar said many marketplaces were still unable to provide the technology for overseas sales because they could not afford to provide a reliable payment system and shipping service for the merchants.

Rosdiana Sipayung, the Cooperatives and Small and Medium Enterprises Ministry’s acting deputy on production and marketing, said SMEs contributed 57 percent to GDP.

Approximately 97 percent of the national workforce worked in small and medium businesses, she added.

Previously, the government had collaborated with several e-commerce companies to increase digital literacy among business owners.

In February, Singapore-based online marketplace Shopee — a member of the Sea Group — initiated a SME development campaign called Kreasi Nusantara in partnership with the Industry Ministry, the Communications and Information Ministry, the Trade Ministry, the Cooperatives and Small and Medium Enterprises Ministry and the Creative Economy Agency. To date, over 30,000 SMEs in 70 cities have joined the campaign.

“Sales have increased by 100 percent since I started selling my products online through Shopee,” said Evi Nurmawati, one of the program’s participants. (rfa)

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