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Jakarta Post

Tokopedia struggles to incorporate ‘warung’, cites digital divide

  • Yunindita Prasidya

    The Jakarta Post

Jakarta   /   Thu, November 5, 2020   /   09:23 am
Tokopedia struggles to incorporate ‘warung’, cites digital divide Fatimah, a 62-year-old warung (kiosk) owner in Kayu Putih, East Jakarta, tends her shop on Wednesday, March 4. (JP/Dzulfiqar Fathur Rahman)

Uneven technological penetration and infrastructure gaps in the country have inhibited Tokopedia’s efforts to incorporate warung (kiosks) into its to online-to-offline (O2O) platform, the e-commerce company has said. 

Tokopedia head of new retail Doni Nathaniel Pranama said the issues had made it difficult to attract small businesses to the company’s O2O platform, called Mitra Tokopedia (Tokopedia Partners).

The platform allows small businesses to sell various products online, including phone credits, internet data packages and groceries.

“There are warung everywhere, but not every region is within reach of adequate technology or internet signal,” Doni said during a virtual media briefing on Monday. 

He said some warung owners used older phones that lacked the advanced functionalities of smartphones and noted that limited infrastructure created issues in the delivery of goods in some regions.  

The pandemic has accelerated the digitalization of businesses, including micro, small and medium enterprises (MSMEs), as consumers shift to online shopping to avoid virus transmission.

Management consultancy Redseer found that the number of Indonesian online shoppers had increased from 75 million to 85 million during the pandemic.

However, a digital divide persists. According to a study by The Economist Intelligence Unit (EIU) titled The Inclusive Internet Index, Indonesia ranks 57th out of 100 countries in internet inclusivity with a score of 66.4 out of 100 in 2020, up only 1 point from its score in 2017. 

The report measured the internet’s availability, affordability and relevance by country, as well as the readiness of people to use the technology.

The report noted that Indonesia experienced “considerable difficulties in supporting internet inclusion in every area of the index except for trust and safety”. 

Communications and Information Minister Johnny G. Plate said on Aug. 22 that some 12,500 villages and subdistricts in the country did not have reliable access to the internet.

But even where the internet is available, the digitization of micro, small and medium enterprises (MSMEs) has had little success. 

Cooperatives and Small and Medium Enterprises Ministry production and marketing undersecretary Victoria Simanungkalit said in a webinar in July that 87 percent of the country’s small businesses had not joined the digital ecosystem.

Of the MSMEs that had attempted to go digital through a mentorship program, she said, only 4 to 10 percent had succeeded. 

But the MSMEs that have managed to digitize their operations have reported gains. According to an internal Tokopedia survey in October, more than 80 percent of Mitra Tokopedia’s partners have served more customers since joining the platform.

“There are many benefits to using the app. There are lots of promos,” Ine Febrina, a warung owner and a member of Mitra Tokopedia, said during the virtual media briefing.

Ine, a homemaker, said her earnings had doubled since she joined Mitra Tokopedia in March of this year.

She said she used the app’s wholesale feature to get better prices for her supplies and received additional income from selling digital products, including data packages and phone credits.