press enter to search

Digitalizing traditional markets, one step at a time

Sebastian Partogi

The Jakarta Post

Jakarta  /  Mon, November 9, 2020  /  11:45 pm
Digitalizing traditional markets, one step at a time

The Tasikmalaya city administration is the first regional administration to digitalize its traditional market through a partnership with Tokopedia. (Courtesy of/Tokopedia)

Millions of Indonesians have always considered the pasar (traditional market) their first stop to buy daily supplies, thanks to affordable prices, a chance for haggling and a wide range of goods. According to data from the Indonesian Traditional Market Traders Association, there are 13,450 traditional markets throughout the country with a total of 12.3 million traders.

Yet, while the COVID-19 pandemic has accelerated people’s adoption of e-commerce and online shopping platforms, poor digital literacy and lack of access to proper internet infrastructure still hamper efforts to help traditional market merchants across Indonesia go digital with their businesses.

According to Izzudin Al Farras Adha, a researcher with the Institute for Development of Economics and Finance’s (Indef) Center of Innovation and Digital Economy, most of the traders at traditional markets still view their trade in a very conventional way that must involve face-to-face transactions.

Similarly, Yusi Yuliana, the head of the Micro, Small and Medium Enterprises (MSMEs), Financial Inclusion and Sharia Finance Unit of Bank Indonesia’s (BI) branch office in Tasikmalaya, West Java, cited the same challenge when she talked about the official launch of a joint project among BI, Tokopedia and the Tasikmalaya city administration to digitalize Cikurubuk Market, the biggest pasar in town.

Read also: How Tokopedia is helping businesses thrive amid the pandemic

As a backgrounder, Tokopedia announced the project through a press release made available on Nov. 3. The press release stated that specifically in the context of the coronavirus outbreak, the digitalization project also sought to prevent physical contact to curb the virus spread and mitigate inflation as well as merchants’ declining revenue amid the pandemic by linking merchants and buyers online.

The Tasikmalaya city administration is the first regional administration to digitalize its traditional market through a partnership with Tokopedia. Tasikmalaya city’s secretary for economic affairs, Ramdhan, who is also a member of the Online Cikurubuk Technical Team, said the traditional merchants’ income had dwindled by as much as 50 percent.

According to the press release, the digitalization project was kicked off in April 2020. As of October 2020, merchants from traditional markets have already sold more than 18,000 products through Tokopedia.

Trying to seize the public enthusiasm about buying items from the traditional market online, now the online market has increased the frequency of its operational services from only five days a week to seven days a week.

The effort has also helped the Tasikmalaya public to make use of Tokopedia’s instant shipping services, allowing them to get their daily necessities like staple foods, vegetables and spices, fruits, ready-to-cook foods, soaps as well as various fashion products delivered straight to their home.

Apparently, the program has been quite successful despite some initial challenges. One of these challenges, to confirm Izzudin’s observation above, is traders’ lack of trust in online transactions.

“Some traders are still doubtful as to whether buyers can actually buy their products through online platforms. These traders still have the paradigm that transactions can only happen when merchants and buyers meet in person, where they can see each other face-to-face,” Yusi told the The Jakarta Post during a Zoom interview on Nov. 4.

This is why, Izzudin said, partnerships among various stakeholders were highly important in turning projects to digitalize traditional markets a success. Yusi said the local BI chapter also turned to such close collaboration by partnering with traditional market cooperatives and big e-commerce platforms alike.

“It would be very tough for us to just visit each trader on a door-to-door basis. Therefore, we’ve decided to work together with the cooperatives, members of which comprise the managers of traditional markets,” Yusi explained.

Julius Aprilian, a staff member of BI’s Tasikmalaya chapter, said the Central Bank had decided to work with established e-commerce platforms in Indonesia to tap into these platforms’ expertise.

“We are developing and facilitating the program with the strength of preexisting e-commerce platforms, so that the city administration won’t have to disburse any more money, since the majority of their budget has been absorbed by actions to mitigate the COVID-19 pandemic,” Julius said in the same Zoom interview with representatives of BI’s Tasikmalaya chapter.

Tokopedia has supported this venture by allotting its staff members to train traditional market staff members on how to use digital commerce platforms under the guidelines provided by BI, according to Julius.

“At the beginning, it was quite hard to convince these traders to go online. Yet, we managed to convince them to try and open an account for their toko (stall) on Tokopedia anyway. Once they had opened their online shops on Tokopedia, we connected them with Tokopedia’s trainers in Jakarta, who provide remote assistance by phone, teaching them how to conduct online transactions and so on,” he said.

Contacted separately, Tokopedia Vice President of Public Policy and Government Relations Astri Wahyuni said that helping traditional market traders upload photographs of all their products to their accounts along with descriptions for each product was the most challenging part of the training.

“On the flip side, the buyers here have also been having a hard time in responding to the merchants’ online promotion activities, because – just like the traders – these buyers were already used to purchasing their items directly at Cikurubuk Market, conducting transactions with merchants face-to-face,” Astri wrote in a WhatsApp message.

Yet, she said, thanks to the full support from the Tasikmalaya city administration and the local BI branch, they had found ways to overcome those challenges.

“For instance, we involve the market cooperatives to help familiarize the public with this new concept,” she said.

She added that, with the success of this collaboration, Tokopedia planned to replicate this program in several areas in the foreseeable future.

Izzudin lauded the partnership, reminding all parties concerned about the tasks they still needed to do to accelerate the digitalization of Indonesia’s traditional markets.

“For instance, a majority of these traders are individuals from the lower-middle socioeconomic bracket. A majority of them use the internet only to access social media platforms like Facebook and WhatsApp; they have yet to understand how to use e-commerce applications,” he told the Post by phone on Nov. 4.

“Now, access is just one problem; the low internet connection speed in our country, especially in rural areas, as well as the 3T regions (the outermost, border and disadvantaged regions), spells another one. Compared to other countries, the speed at which we download UX/IX features on these apps to our gadgets is also still relatively low,” he added.

He went on to say that a lot of these traders were still inept at using digital payment methods like OVO and GoPay, and it would be a great challenge for the government to help these merchants switch to these methods.

Julius added that, in the future, the digitalization of traditional markets would also mean that an online price control system could be put in place.

“The online system can link producers directly with merchants, providing buyers a real-time price information system,” he said.

Yusi said that, not only would the online price control system help stakeholders keep prices of items stable, the system would also help buyers check prices more conveniently from home.

Your premium period will expire in 0 day(s)

close x
Subscribe to get unlimited access Get 50% off now