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Jakarta Post

Facebook Shops launches in Indonesia amid COVID-19 shock to MSMEs

  • Mardika Parama

    The Jakarta Post

Jakarta   /   Wed, September 2, 2020   /   08:20 pm
Facebook Shops launches in Indonesia amid COVID-19 shock to MSMEs The Facebook App logo is displayed on a smartphone in Arlington, Virginia, in a file photograph taken on March 25, 2020. (AFP/Olivier Douliery )

Facebook launched on Tuesday for Indonesian users its e-commerce feature, Facebook Shops, which integrates business accounts across all platforms of the social media giant while offering data analytics for online shop owners.

Facebook Indonesia country director Peter Lydian told reporters at virtual press conference on Sept. 1 that the new feature was now available to Instagram business accounts and Facebook users in the country.

Peter said that Indonesia was one of five countries in the world with the highest number of Instagram business accounts, which meant that Facebook Shops would be an impactful feature for micro, small and medium enterprises (MSMEs).

“We have developed our platform to become a catalyst for MSME development. Through Facebook Shops, we can provide market access and connect businesses with communities,” he said.

MSMEs, which contribute more than 50 percent to Indonesia's gross domestic product (GDP), have been particularly hard hit by the economic fallout from the pandemic.

According to a recent survey by the University of Indonesia business school's Demography Institute (LD-FEUI), 77 percent of social sellers –  people who create and pursue sales leads using social media – expected current revenue pressures to continue for the duration of the COVID-19 pandemic.

Indonesia's GDP contracted 5.32 percent year-on-year in the second quarter, according to Statistics Indonesia (BPS) data. Meanwhile, the government's best-case scenario projects 1 percent growth this year, or to shrink to 0.4 percent in its worst-case scenario.

The new digital storefront feature integrates a business' Instagram account with its Facebook account to allow it to expand customer reach. The feature also comes with the Facebook Commerce Manager tool that allows shop owners to customize and manage their digital storefronts.

Peter said shop owners could also gather aggregate data on their customers through Facebook Shops, such as customer demographics including location and age, that could help businesses expand and develop.

The data also provided information on "what [kinds of] posts people like and when [customers] typically go online”, he added.

Peter stressed, however, that Facebook did not collect customers’ personal data for sharing with shop owners without their consent.

“We don’t share personal information like names and email addresses. User activity on Facebook Shop will also not be shared with [Facebook] friends without user consent,” he said.

Facebook has faced global scrutiny on digital privacy issues in recent years, including a $5 billion settlement with the United States Federal Trade Commission (FTC) in July 2019 for a wide range of privacy violations, and the 2018 Cambridge Analytica data misappropriation scandal dating back at least three years that was uncovered in the United Kingdom.

The company has vowed to provide “a comprehensive new framework for protecting people’s privacy”, according to Reuters.