Many Indonesian SMEs Still Cannot Do Online Business: Here Are the Main Obstacles

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Adi Ahdiat 14/11/2022 15:10 WIB

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According to a Boston Consulting Group (BCG) survey report, the biggest obstacle for Indonesian SMEs in undergoing digital transformation is a lack of financing.

Indonesia's Top 5 Challenges for SMEs in Digital Transformation (August 2022)

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Indonesia's Top 5 Challenges for SMEs in Digital Transformation (August 2022)

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According to the Ministry of Communication and Informatics (Kemenkominfo), in 2022 there were approximately 64 million micro, small, and medium enterprises (MSMEs) throughout Indonesia.

However, the number of digital MSMEs capable of conducting online business was only around 19 million units or 29%.

"Indonesia needs to tap into the remaining 71% of MSMEs to leverage opportunities in the digital space," said the Alternate Chair of the Digital Economy Working Group (DEWG) G20, Dedy Permadi, in a press release on the Kemenkominfo website, Thursday (10/11/2022).

"The task is to encourage MSMEs to survive and even scale up, expanding their businesses in terms of quality and quantity. After scaling up, they can then go international. Our goal is for MSMEs to be globally competitive," said Dedy.

Based on a report by the Boston Consulting Group (BCG) and Telkom Indonesia, from approximately 3,700 local MSMEs surveyed, the majority were hampered in their digital transformation due to a lack of financing.

Others also felt hindered by a lack of digital skills training, insufficient policy support, a lack of business mentors, and inadequate digital infrastructure, with percentages as shown in the graph.

In response, BCG provided various recommendations to strengthen Indonesia's digital MSME program, ranging from utilizing market research data to improving access to digital financing.

"Data-driven decision-making can assist in product design, attracting market segments, and helping target sales to the right customers," said BCG in its report.

"Digital technology can also be used to identify MSMEs that qualify for financing. This digital approach can help simplify the financing process, making it easier and faster," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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Many Indonesian SMEs Still Cannot Do Online Business: Here Are the Main Obstacles

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