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usiness players expect to resume normal operations in September or October as companies weather economic paralysis and lay off workers to cope with the economic shocks of COVID-19.

Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan Roeslani told The Jakarta Post that businesses expected the coronavirus pandemic to peak around June before seeing major improvements by September.

“However, the economic recovery from the pandemic could last until 2021 or even the next two years,” he said on Monday. The rebound period would be especially long for industries hit hardest by the pandemic, such as tourism,
he said.

Scientists have predicted that the peak of the COVID-19 outbreak in the country will occur around April with about 71,000 cases as the government accelerates rapid testing to identify and contain the virus. As of Tuesday, 2,738 COVID-19 cases had been identified in Indonesia with 221 deaths, among the highest death rates in the world, half of which were in Jakarta.

After President Joko “Jokowi” Widodo announced a public health emergency and a large scale social distancing policy, some manufacturers stopped production such as carmakers Suzuki Indonesia and Honda Indonesia. More than 16,000 employees in the capital city have been laid off or have had to take unpaid leave as companies grapple with the effects of the coronavirus.

“What businesses can do right now is maintain liquidity and cash flow,” said Rosan. “Halt nonessential spending to avoid layoffs. What’s important now is to be able to survive during this pandemic.”

Micro, Small and Medium Enterprises Association (Akumindo) chairman Ikhsan Ingratubun said the government needed to prepare stimuli for small businesses that employed daily workers most vulnerable to economic shocks. More than half of Indonesia’s workforce, 70.49 million people, are informal workers with minimal or no social support.

“I ask for relief on electricity and water [bills]. We don’t have any income. My business closed down. I don’t know how to pay the THR [holiday bonus],” said Ikhsan, the owner of a restaurant chain. “Without a proper policy there will be a social and security threat.”

A recent survey by the Mobile Marketing Association (MMA) and SurveySensum echoes Kadin’s projection. It finds that business players expect the situation to normalize within the next five months.

The survey further stated that the COVID-19 pandemic had brought down business revenue, with 76 percent of the respondents saying the pandemic had “severely disturbed daily business activities”.

Indonesia’s gross domestic product growth is expected to slow to 2.3 percent this year, the lowest in 21 years, and even contract by 0.4 percent under the worst-case scenario, according to government estimates.

Of the 80 businesses surveyed in March, more than half have cut their hiring budget and out-of-home advertising expenditures, such as billboards and banners. In addition, 45 percent of respondents said they had cut market
research.  

“But my hunch is the market research budget will rise again because businesses want to know what customers need in times like this,” said SurveySensum founder and chief executive officer Rajiv Lamba in a webinar on April 3.

He added that to cope with the losses caused by the coronavirus, businesses were focusing on maximizing e-commerce and their digital media presence as well as changing their supply chain to deliver products to consumers’ doorsteps.

However, demand in some categories of online purchases, such as cosmetics, electronics and travel, has been trending downward, while e-learning platforms and online medical consultation services are gaining clients.

Facebook Indonesia marketing head Hilda Kitti said small and medium enterprises (SMEs) should start going digital, whether through online advertising or e-commerce to keep their businesses afloat during the coronavirus pandemic.

“The pandemic can be an opportunity to connect with customers. How businesses deal with the crisis can influence consumers’ perception of the company in the future,” she told the press on March 26.

Hilda added that the most important thing for businesses was to survive in the current situation. The month of Ramadan, which starts on April 23, could still be an opportunity for businesses to reach out and benefit, especially SMEs in the food and beverage and fashion sectors, she said.

Hilda also said SMEs should partner with delivery services to reach consumers who were self-isolating. “But don’t do a hard sell. Instead, do strategic marketing such as showing that your business cares about consumer well-being during the pandemic,” she said.