The e-Conomy SEA report compiled by Google, Temasek, and Bain & Company states that Indonesia is the largest digital economy market or internet economy in Southeast Asia, with 37 percent of digital consumers using new services due to the Covid-19 pandemic. Partner and Leader of Southeast Asia Private Equity Practice at Bain & Company Alessandro Cannarsi, said that in 2020, more than a third of digital service consumers in Southeast Asia started using new online services because of Covid-19, including Indonesia.
More than half of the country's new digital consumers, 56 per cent, are from non-metro areas and 93 per cent of them say they will continue to use at least one digital service after the pandemic ends. "Indonesia remains the largest internet economy market in Southeast Asia and a major competitive arena for technology platforms," said Cannarsi in the e-Conomy SEA 2020 Report, Tuesday (24/11/2020).
Therefore, according to Cannarsi, new consumers are very much ready to become the main driver of digital innovation in this region. Although it is still too early to confirm the results, he predicts that growth and acceleration will continue in the digital service sector in the next few years. "Covid-19 has changed the way of life for many people in Southeast Asia, and the development of the digital financial services sector, HealthTech, and EdTech is needed to adapt to the changes taking place in society," he said.
In addition, funding has remained solid in Indonesia, with 202 investment deals being booked worth USD 2.8 billion during the first half of 2020, compared to a total of USD 3.2 billion from the 355 investment deals throughout 2019. In line with Cannarsi, Chief Investment Strategist, Temasek, Rohit Sipahimalani, said that his party still sees the great potential of Indonesia's internet economy, with growth driven by the large number of very active internet users and even more active use of the internet due to the pandemic. "In addition, the large number of new users of internet-based technology and e-commerce raises prospects for new businesses in Indonesia, as well as encourages growth for existing businesses," said Rohit. Thus, he also continues to see investment opportunities in the Southeast Asian internet economy, which is in line with the structural trend to encourage social progress by utilizing technology. "Together with the private sector, government and society, we are committed to helping build a more sustainable economy in Southeast Asia," concluded Rohit.
The e-Conomy SEA report prepared by Google, Temasek, and Bain & Company states that the overall growth of the digital economy in Indonesia is estimated to be worth USD 44 billion or IDR 624 trillion (USD 1 = IDR 14,190) in 2020 and is estimated to reach USD 124 billion by 2025. "Combining analysis of Google Trends, Temasek, and Bain & Company as well as industry sources and interviews with experts, this report details which sectors are performing the best and which have been most affected by the pandemic," said Google Indonesia Managing Director, Randy Jusuf, in the report e -Conomy SEA 2020, Tuesday (24/11/2020). This analysis is Randy explaining that the digital economy includes e-commerce, transport and food, online travel, online media and financial services.
For this year, he added 2 sectors that have experienced quite good growth, namely Healthtech (Health Technology) and Edtech (educational technology), in which the 2 sectors have accelerated very quickly during this Covid-19. He continued, he revealed that the e-commerce sector rose 54 percent to USD 32 billion in 2020, compared to only USD 21 billion in 2019. The growing momentum of e-commerce in Indonesia is also reflected in the 5x increase in the number of local suppliers trying to sell online due to the pandemic. "This year's report shows Indonesia's digital economy continues to grow in double digits, led by e-commerce and online media," he explained. Randy said that with the pandemic, certain sectors such as travel and transportation have indeed been hampered but, as this report shows, by 2025 both are expected to revive in the short to medium term."The steady growth of the internet economy like this is also happening in Southeast Asia. The report found that the region's digital economy is growing more rapidly due to the pandemic, reaching USD 100 billion in 2020 and will exceed USD 300 billion USD by 2025," he concluded.
Minister of Cooperatives and SMEs Teten Masduki said the digital value of Indonesia's economy is the largest in Southeast Asia. By 2025, the digital value of Indonesia's economy is estimated to reach IDR 1,700 trillion. Teten said the digital market value must be utilized by cooperatives and MSMEs from within the country, otherwise it will be invaded by products from outside. However, currently the cooperatives that are included in the digital ecosystem are still very low, only around 906 cooperatives or 0.73 percent of the 123 thousand active cooperatives. Therefore, the digital transformation of cooperatives must be accelerated so that they can compete with other business entities. "Currently, it is a momentum to modernize cooperatives, a momentum to align cooperatives with other business entities, a momentum to make cooperatives a rational choice for the welfare of society," said Teten in the Declaration of the Digital Innovation and Transformation Movement, in Bandung, Thursday (19/11/2020) .
He said that at the time of the Covid-19 pandemic, it was proven that MSMEs connected to digital platforms were able to survive. Data shows that sales in the second quarter of digital platform users increased 26 percent compared to last year, while those who were not connected to digital platforms experienced a decrease in turnover. Teten emphasized that this is a challenge to increase the number of cooperatives that will take advantage of the digital platform. Therefore, the transformation of cooperatives to digital technology must be carried out. "Now is our digital era, it is impossible to get out of this era. Everything is now connected in a digital ecosystem," he said. He said the digitalization of cooperatives is an instrument for cooperatives to improve service, transparency, accountability so that people who are members of cooperatives can be served optimally and increase public trust. "Currently, it must be admitted that cooperatives are still considered old school, not modern, service is slow, and accountability is poor. This is our momentum to reverse the stigma, cooperatives can also take greater advantage of corporations. Cooperatives can bring better welfare, "he said.
Thus the Job Creation Law provides support for cooperatives and MSMEs to carry out the transformation. In the Job Creation Law, there are five transformations that are expected to occur, namely the transformation of informal to formal businesses, transformation of digitalization. As well as the transformation of individual or small-scale businesses to economies of scale, technology-based transformation and transformation of MSMEs based on areas, communities, clusters and supply chains.
