For a variety of reasons not everyone was into online shopping. One of the reasons could have been a reluctance to buy goods that a customer had not seen or held first. Or, a preference for the bricks and mortar shopping experience, and that going to shops also gives customers the chance to actively move around, hence making them feel like they have somehow worked out and feel good about it.
The pandemic, of course, changed all that.
Sri Adiningsih, economics professor at Gadjah Mada University who founded the Social, Economic and Digital Institute has pointed out how the pandemic has accelerated the transformation to a digital economy in Indonesia.
“The Cooperatives and Small and Medium Enterprises Ministry has found that online sales of food products increased 300 percent after the pandemic arrived in Indonesia in early March,” Sri wrote in The Jakarta Post.
In addition, according to Sri, the extreme growth of online transactions can also be observed in the fintech industry, with a more than 200 percent increase in P2P lending taking place in March.
Furthermore, Sri explained that in April, the World Economic Forum said that countries with ideal environments for digital firms to thrive were more likely to capture inward investment opportunities and spur economic growth.
The fact that the COVID-19 pandemic boosted the acceleration of the digital transformation is confirmed by William Tanuwijaya, chief executive officer and founder of Indonesian technology company Tokopedia.
William told the Post in an email interview that as of September 2020, there were more than 9.4 million sellers on Tokopedia, compared with 7.2 million in January just before the pandemic hit.
These data indicate that opening a store on Tokopedia is found to be lucrative by more people, especially as there are more than 100 million visitors to Tokopedia every month now.
Of all the sellers in Tokopedia, many are selling food and beverages including coffee, as many restaurants and coffee shops had to close their bricks and mortar outlets, hence looking for digital platforms to sell their products.
Meanwhile, some sellers who have been with Tokopedia for some time, pointed out that they rely more on selling through the digital platform.
Firmansyah, also known as Pepeng, owns a coffee shop named Klinik Kopi in Yogyakarta, and he had to close the shop in late March due to the pandemic.
Fortunately, as Klinik Kopi already has a store in Tokopedia since 2018, Pepeng shifted his focus to selling more on the digital platform, and he said that 90 percent of sales are now generated by Tokopedia.
The popularity of coffee on the platform is also acknowledged by Tokopedia.
“One of the most sought-after [goods] categories [in Tokopedia] is food and beverages, with the most popular product being coffee in 1-liter bottles,” said William.
He went on to say that the “household needs” category also saw significant growth in sales, and pointed out a store named Dewa Collection Bali -that sells macramé woven products- as one of the local home industries that enjoyed a fivefold increase in orders during the pandemic – higher than ever.
William Tanuwijaya – CEO & Founder of Tokopedia
Meanwhile, in the sports category, the launch of locally made bicycle brand Element Indonesia was met by great enthusiasm, with 200 units being sold in just 40 seconds after it was offered on Tokopedia.
Element Indonesia then broke the Indonesian World Records Museum (MURI) record for the highest sales of folding bikes in one minute.
Furthermore, increases in sales were also evident during online events that were held in place of canceled offline events such as the second Jakarta Sneaker Day (JSD) on July 27-30, with double the volume of transactions, compared with the previous JSD, being recorded.
Other goods produced by local creators, such as shoes, backpacks and cloth masks are also highly sought-after, according to Tokopedia’s data.
This finding indicates that the pandemic has not broken the spirit of local businesses to innovate and collaborate with strategic partners as part of efforts to adapt.
The COVID-19 pandemic also accelerated the adoption of technology and the internet, on which businesses can continuously operate and people across the archipelago can enjoy the convenience of e-commerce from their homes. Here, they can find a wide selection of products with transparent and similar pricing no matter where they may live.
Significant impact: Tokopedia CEO and founder William Tanuwijaya presents the company's impacts on Indonesia's economy, from attracting a high percentage of new sellers in its platform to driving more than 1 percent of the country's economy.
Tokopedia strives to help minimize the impact of the pandemic, joins hands with government
Indeed, the rise of online sales is to be expected. As the risk of contracting the coronavirus lurks in crowded public spaces such as shopping centers, people have no choice but to shift almost fully to online shopping.
Therefore, aside from providing people’s needs conveniently through its online merchant partners, Tokopedia ensures that its service is always accessible to Indonesian citizens during the pandemic. And more than just prioritizing service, Tokopedia has also maintained price stability and shut down many stores who have charged unreasonably high prices for certain items, especially in the earlier stages of the COVID-19 pandemic.
As for those who have the luxury to stay at and work from home, Tokopedia also offers such promotions as free shipping for daily needs, as well as other promotions for health products including vitamins, face masks and hand sanitizers. Moreover, Tokopedia also guarantees that necessary health and hygiene protocols are followed by its logistics partners, with packages and sorting areas sprayed with disinfectants, for instance.
Especially for daily needs that are available in traditional markets, Tokopedia has joined hands with the Communications and Information Ministry in the UMKM Go Online “Grebeg Pasar” (Micro, small and medium enterprises [MSMEs] go online “Market Surprise Visit”) program to balance the distribution of digital access to traditional markets.
This program was held across traditional markets in 50 cities and regencies in Indonesia, with six locations chosen from each city or regency.
Another example is Cikurubuk Market in Tasikmalaya city, West Java, which with the help of Tokopedia’s partnership with the city administration, the Bank of Indonesia’s (BI) Tasikmalaya branch and Cikurubuk Tasikmalaya Market Management Cooperative, established Pasar Cikurubuk Online, which enables customers to buy the products available in the market through Tokopedia.
Pasar Cikurubuk Online makes physical distancing possible and at the time of writing, it had sold more than 18,000 goods since its launch in April 2020.
Digital literacy for all: Village residents received assistance for improving digital literacy.
Regarding sellers and consumers from outside of Indonesia’s main cities and other remote areas in the archipelago, William said that Indonesia’s development had to start in the villages.
“Our dream is for anyone from anywhere to be able to grasp the opportunity and start [building their business] from wherever they are, not necessarily having to come to Jakarta first,” said William.
The Post quoted Mandiri Institute head T. Yudo Wicaksono, who said in a webinar hosted by the Indonesian Banking Development Institute (LPPI) in July, that MSMEs’ impact on the economy can become greater if more entrepreneurs go online.
Moreover, according to the institute’s survey in May, 42 percent of offline MSMEs have stopped operating, compared with 24 percent of online MSMEs that have stopped operating.
As for Tokopedia, to further support MSMEs’ digitalization, other joint initiatives have also been conducted in collaboration with the Tourism Ministry, as well as with the Coordinating Maritime Affairs and Investment Ministry. With the former, online publications and provision of discounts and cashback are given to boost marketing for products created by MSMEs, and with the latter, Tokopedia has launched the joint #BanggaBuatanIndonesia (Proud of Indonesian made) movement, promoted MSME digital onboard training, as well as capitalizing through the micro credit program Kredit Usaha Rakyat (KUR).
Furthermore, for those who are heavily impacted by the pandemic, Tokopedia has set up a donation platform, that has successfully raised more than Rp33 billion (US$ 2.21 million) to be distributed to MSMEs in need, healthcare workers and many others who are hit hard by the pandemic.
