Jakarta, Indonesia – Despite being hit hard by COVID-19 in 2021, Indonesian small businesses beat their Asian-Pacific rivals in business growth, in part because of their high e-commerce penetration, according to a report by CPA Australia. The report notes that this growing trend is set to continue until this 2022.
TheAsia-Pacific Small Business Survey polled 4,252 small business owners or managers, including 301 from Indonesia, in 11 Asia-Pacific markets to understand business conditions and confidence. As a result of the pandemic, Indonesian small enterprises were the second most likely to be adversely impacted. Seventy-two per cent of Indonesian respondents named COVID-19 as the most damaging factor to their firm.
When asked about how they had coped with the pandemic, 45 per cent of respondents stated that they had transferred their business online. E-commerce is becoming increasingly important to businesses, with 68 per cent of respondents reporting more than 10 percent of their revenue coming from online sales in 2020. In 2021, 61 per cent of businesses plan to utilise social media to promote their products and services, up from 51 per cent in 2020.
In 2021, seven out of ten Indonesian businesses expect to see a rise in revenue, making the country the region’s business growth leader. When it comes to creating jobs, small enterprises outnumber the larger corporations. Respondents predicted that they will increase their workforce by 35 per cent in 2021.
Dr. Adi Budiarso, chairman of the CPA Australia Indonesia advisory committee at FCPA Australia and the director of the financial sector policy centre at Indonesia’s ministry of finance, said that 2021 was a very challenging year for small businesses in Indonesia because of the pandemic.
“Nonetheless, I am proud to see the resilience and agility of Indonesia’s small businesses. The survey findings not only show their skill in sustaining business operations but also growing through the use of e-commerce. Government assistance programs such as PEN program and Rumah BUMN no doubt assisted with this,” Dr. Budiarso said.
Strong business forecasts for the year 2022 are a direct result of these competencies. Eighty-seven per cent of those questioned believe their companies will grow this year, making Indonesia one of the most upbeat markets studied. Since many want to hire more workers, this is the most common outcome of 51 per cent.
Indonesians are the second most likely to believe that they will require outside funding in 2022, with 91% of those polled believing this to be true or very likely. 60.8% will look for outside funding to help their firm develop. However, only a quarter of those polled believes that getting a loan will be simple or very simple in the future.
Dr. Budiarso emphasised, “Micro, small and medium enterprises (MSMEs) are major contributors to our economy and employment. A friendly financing environment would enable them to keep expanding. According to the survey findings, banks are their primary source of finance. New rules issued by Bank Indonesia should encourage local banks to increase their lending to MSMEs from June this year.”
