While this is true for major cities like Jakarta and its surroundings, the advent of technology has brought a game changer to level the playing field in other parts of Indonesia.

Take Tarakan as an example. An island in North Kalimantan, it has rapidly advanced its infrastructure in recent years, leading to the creation of more business opportunities.

Abimanyu, 35, is one of numerous emerging MSMEs in Tarakan who had successfully utilized technology to leverage his business. At first, when he moved to Tarakan after getting married, he had trouble finding a job in the city that would support his new family.

“It was quite difficult for me at first to find a job, since I just moved [to Tarakan] and have no acquaintances, let alone a network to find a stable job. Thus, for months I tried to see what I could do to create an opportunity for myself,” Abimanyu said.

During his search for work, Abimanyu noticed that online-based food businesses were growing rapidly. This inspired him to start his own business, and after taking an online cooking course, he launched Nasi Kota-ku and began to use social media to market his food menu.

According to data from North Kalimantan Communications and Information Department, 8,976 micro, small and medium enterprises (MSMEs) were created in 2019, resulting in a current total of 13,427 MSMEs across various sectors. Citizens in Tarakan have been taking advantage of the opportunity to launch new businesses, particularly due to growth opportunities attributed to digitalization.

MSMEs in Tarakan have been greatly supported by Rumah BUMN, an organization responsible for accelerating the digital transformation of MSMEs in the city. When the COVID-19 pandemic hit, it became increasingly urgent to boost digital literacy amongst MSMEs to help them continue to reach customers when their traditional means of selling were disrupted. As part of its mission to help MSMEs go digital, Rumah BUMN invited on-demand digital super-app Grab to become a partner, engaging the platform to provide reskilling, training and education on how to utilize Grab features to help expand MSMEs’ business.

Yayan Nuryana, Rumah BUMN Telkom Tarakan enterprise, government, and business manager, said that they understood that the growth potential possessed by Tarakan’s MSMEs could be greatly uplifted through the use of technology.

“However, at the provincial level, internet penetration and digital literacy are urgently needed to be leveled up since fewer than 12 percent of all MSMEs in North Kalimantan have utilized digital platforms. With the minimum access to relevant technology to advance their business, Rumah BUMN aims to introduce and expose MSMEs to numerous digital innovations like Grab and foster their potential to grow, helping boost business and better serve communities in Tarakan and the North Kalimantan region,” he said

After excelling in managing Nasi Kota-ku online, Abimanyu realized the enormous possibility to further develop his business. He decided to join a training class by Rumah BUMN and Grab to learn how to bring more potential opportunities to Nasi Kota-ku.

Abimanyu then registered as a GrabFood merchant, and quickly saw Nasi Kota-ku grow even more as he gained greater knowledge about running a culinary business. Onboarding with GrabFood gave his business so much visibility to the point that he decided to open an offline store.

“When I opened my offline shop, the online sales were further positively affected because customers at GrabFood could also see photos of the offline store. This combination has helped me to advance an upscaling stage for Nasi Kota-ku, which is now an omni-channel business. Now almost 40 percent of its sales come from GrabFood and I’m so delighted to be able to employ four more staff in enhancing my business’ service,” he said.

Another digital success story in Tarakan comes from William, one of the owners of Warung Teras Tarakan. a well-known restaurant established in 2013.

At first, William and his family only relied on word-of-mouth promotion, and it had never occurred to them to do digital marketing or enter a digital platform before. However, he saw that while the word-of-mouth promotion strategy was strong, the business could fall to the wayside if it was not accompanied by digitalization, as competition in the restaurant sector in Tarakan is also getting increasingly tougher. Warung Teras immediately registered as a restaurant on GrabFood.

"After using GrabFood, I felt the ease and benefits of digital platforms in developing my business. Besides that, I don't have to bother to find new human resources for food delivery couriers anymore. I was greatly helped by the Grab delivery system, which is easy and equipped with technology and accurate map points," William said.

Meanwhile, other MSME business owners in Tarakan are now able to see that they can sustain long-term business success by effectively using digital technology, like the fashion business Boutique Smile that has been up and running for 12 years.

While Boutique Smile owner Liena has utilized the emerging social media trends, she also set out an ambition to expand her business by taking it from offline to online. With increased visibility, Boutique Smile gained popularity and experienced surges in demand for its trendy Japanese and Korean designs. However, Liena found that she needed additional support to manage this new opportunity.

“I wasn’t familiar with the logistics system and struggled a lot to find a suitable delivery service to deliver my products to the customers. I finally decided to try to learn how to utilize the GrabExpress service and now I’m able to reach my customers faster and easier, especially with the same-day feature,” she explained.

Digital platforms have helped Liena to continue experimenting on new things and innovating her business line. The ease of operating online has also allowed her to expand into the culinary sector with Smile Food, a fresh homemade dessert and food business that offers dishes from overseas locations.

“Since I always travel to many cities and countries to curate the trending fashion apparel for my boutique stock, now I try to introduce new culinary trends such as Asinan Jakarta, Mango Sticky Rice, and Fruit Salad. GrabExpress is still my main delivery service as I trust its reliability to ensure the food arrives fresh and in a good condition, but for the past two months I also onboarded GrabFood to reach an even wider customer segment, and I’m thrilled to see the rapid growth of Smile Food’s sales within a short time,” Liena said.

With more game-changing stories of Tarakan MSMEs successfully harnessing opportunities in digital platforms, their positive performance aligns with Statistics Indonesia (BPS) 2020 data where 38.08 percent of North Kalimantan’s economic contribution came from Tarakan, with the MSME sector as its main driver.

However, as is the case in many places, North Kalimantan's economic growth slowed down in the first quarter of 2020 due to the pandemic. Even so, Tarakan’s local government remained committed to ensuring that MSMEs were able to continue to operate and help to provide for themselves and their communities. As proof of the emerging dynamics of MSMEs in Tarakan, government support to create a conducive business environment for MSMEs development helped the city win the Natamukti Award in late 2020, a specific award to honor the local government’s efforts in developing an MSMEs ecosystem, and Tarakan also won the title of The City of 1000 Cafes.

Tarakan Mayor Khairul said that Tarakan’s achievement demonstrated the importance of synergy between the government and the private sector.

“The public and private sectors working together is very much needed in accelerating Tarakan's economic recovery and growth by helping MSMEs evolve and grow. The partnership between Rumah BUMN and digital platforms like Grab is indeed helpful to increase digital access to and from MSMEs, and enable them to upscale their business amid this challenging pandemic. We believe that the synergy shown between Grab and Rumah BUMN will allow for a more significant economic turnover and encourage the growing development of Tarakan’s economy in general, and we are encouraged by the great success stories of entrepreneurs within our community,” he said

Grab Indonesia director of East Indonesia Halim Wijaya also emphasized that the optimistic growth shown in Tarakan resulted from the collaborative partnership between the public and private sector.

“We share the same cause with the local government to strengthen the economic capacity of Tarakan, and we observed the government’s dedication in enabling MSMEs development. As the leading super-app, Grab has focused on distributing even access to digital transformation around the archipelago and hopes to continue providing inclusive access to technology, specifically for MSMEs acceleration in order to build their competitive capacity. This is also included in more remote areas like Nunukan and Tarakan.” he said.

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