Jakarta. The Ministry of Communication and Information Technology has set a target of having 8 million small and medium enterprises market their products and services online by 2019 to help them boost revenue and pave the way for their entry into the global market.
Around 7.2 million SMEs currently use online platforms to sell their products and services, close to the government's target of 7.3 million by the end of this year, Septriana Tangkary, director of economic and maritime information and communication at the ministry, said last week.
The country currently has more than 60 million SMEs, according to Bank Indonesia data.
"We urge small and medium business to go online," Septriana said, noting that 80 percent of SME that are online have experienced an increase in their daily revenues, while they also have opportunities to access international markets.
About 36 percent of them use social media platforms, such as Facebook and Instagram. Indonesia has the fourth-highest number of Facebook users in the world, after the United States, India and Brazil, with 115 million actively using the platform every month.
While it provides large market exposure, social media platforms are not best equipped for business in terms of payments and securing customers' data.
Therefore, Septriana said the ministry is urging SMEs to join e-commerce platforms such as Blibli.com, Tokopedia, Bukalapak and Mataharimall.com.
"A lack of understanding of technology is one of the main challenges for SMEs to go online, which involves the use of email and the internet. There are also several SMEs that do not have online accounts," said Agus Mulyo Pribadi, SME sales channel supervisor at Blibli.com.
The ministry created "Gerakan Ayo UMKM," in partnership with the online marketplace in 15 cities across the archipelago to help SMEs tap opportunities through online platforms. "We are here to help them," Agus said.
Agus added that there are currently 2 million online sellers on Blibli.com, with 100,000 of them SMEs. He said 70 percent of SMEs produce their own products, while the rest are resellers.
Florian Hoppe, co-leader of digital practice in Asia Pacific at global management consultancy Bain & Co., said Indonesia needs to unleash its e-commerce potential by tackling the hurdles and challenges posed by logistics and payment systems.
"Payment is one of the last roadblocks where [the business] is still very cash-based, and now it is shifting to a heavy push on e-payment, which is really helping to get the unbanked into the economy and remove the hurdles," Hoppe said.
"The great news is that in the past few years, there has been greater connectivity, smart devices and network expansion by telecommunication operators. They [the unbanked] now have access to the world around them," he added.