Indonesian small and medium enterprises (SMEs) could book new business growth this year by leveraging cashless payments and social media, as the COVID-19 pandemic continues into its second year, according to a study by homegrown ride-hailing giant Gojek. The study showed that contactless payment volumes have risen exponentially since last year. Bank transfers rose 345 percent, pay later credit payments 290 percent, Quick Response Indonesia Standard (QRIS) payments 180 percent and GoPay e-wallet transactions 97 percent. “Since the pandemic, there has been more demand for cashless payment. Even warung [food stalls] now have contactless payment options,” Gojek head of merchant platform business Novi Tandjung said during a press briefing on Tuesday. She cited a 2019 Facebook study that projected per capita online spending in Southeast Asia would grow over threefold between 2018 and 2025 due to rapid digitalization. Cooperatives and SMEs Ministry data show that over 10 million Indonesian SMEs onboarded digital platforms last year, a figure that is expected to continue rising this year amid ongoing COVID-19 containment measures, providing a lucrative market opportunity for digital service providers including Gojek, Grab, TikTok and Facebook, among others. The government has also rolled out several relief programs to protect Indonesian SMEs, which account for 60 percent of Indonesia’s gross domestic product (GDP) and employ 97 percent of the country’s workforce.
Gojek, one of only two decacorns in Southeast Asia, found that 42 percent of its food and beverage merchants also sold their goods on social media, a rising trend amid the pandemic. “SMEs might get overwhelmed by the new cohort of consumers as they increase their online promotion. So, they should use a smart keyboard to help them respond to consumers’ questions and requests efficiently,” Novi said referring to Selly, Gojek’s smart keyboard application. The company has onboarded a high number of SMEs as a result of the COVID-19 pandemic. Novi said the company once saw 3,000 SMEs joining its platform in a single day. Gojek’s courier service GoSend grew by up to 90 percent in transaction volume during the pandemic as more and more people shopped online, Novi said. GoSend, which made an operational profit last year, is one of Gojek’s core lines of business.
Despite strong domestic growth, Gojek co-CEO Kevin Aluwi said on Jan. 15 that the company would focus on Gojek’s business operations abroad to expand its market share in Southeast Asia and boost its business performance as the Indonesian transportation industry would likely remain sluggish this year. Gojek also operates in Singapore, Thailand and Vietnam. Meanwhile, Nayara batik store owner Andrina Effendi said her business turnover had picked up ever since she began operating online and promoting through social media in late 2020, recovering from an earlier sales slump. “We were faced with the possibility of closing down our shop, but we decided to develop our online presence. Now, we are very optimistic about our business growth this year because we are more prepared,” she said. Andrina, however, is an exception as 63.4 percent of small business respondents expected their businesses to decline this year, according to a survey by financial technology firm KoinWorks. Some enterprises, such as those in the services sector, believe it will be difficult to operate before COVID-19 vaccines are widely administered. A study by the Asian Development Bank (ADB) showed that Asia Pacific business-to-consumer digital platform revenue hit US$1.8 trillion in 2019. The figure represents 48 percent of the total $3.8 trillion worldwide digital platform revenue. "The number will increase significantly in 2020 as more business transactions such as online ride-hailing and taxi, food delivery and e-commerce migrated to the digital space due to the COVID-19 pandemic," the study noted.
