Exclusive, Chairman Of idEA Bima Laga Was Surprised When Conventional Traders Accused E-Commerce Of Being The Cause Of Their Decline In Trade

According to Bima Laga the Chairman of idEA, the growth of E-Commerce in Indonesia has occurred very rapidly in the last few years. (Photo Savic Rabos, DI Raga Granada VOI)

E-Commerce in Indonesia has shown rapid development in recent years. The COVID-19 pandemic that has hit has accelerated the growth rate of E-Commerce. For this reason, the General Chair of the Indonesian E-Commerce Association (idEA) Bima Laga was surprised when conventional traders at the Tanah Abang Wholesale Market blamed their low turnover because of E-Commerce which had recently become popular. What really happened?

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The growth of E-Commerce in Indonesia shows very encouraging figures. According to data from idEA presented by Bima Laga, the value of Indonesian E-Commerce transactions in 2019 was only 19 billion USD, in 2020 when the COVID-19 pandemic hit it increased to 44 billion USD, and in 2021 it will be 70 billion USD. Meanwhile in 2022 it will be 77 billion USD. Estimates are that for 2030 the amount will soar to 130 billion USD.

However, Bima continued that the figure of 130 billion USD will soon be reached. The problem is that developments in the realm of E-Commerce are very dynamic. "God willing, we can achieve it by 2025," he said optimistically.

Even though conventional traders such as at Tanah Abang Market have complained about the rapid growth of E-Commerce. They accused E-Commerce of being the cause. Their stores are empty and sales continue to fall. Even though they have also penetrated the realm of E-Commerce even though they still carry out conventional sales at the stalls they own. That's why when the Minister of Trade Zulikifli Hasan and the Minister of Cooperatives and SMEs Teten Masduki visited the largest wholesale market in Indonesia, these conditions were conveyed by the traders.

However, according to Bima Laga, the silence of conventional markets such as Tanah Abang Market has been happening for a long time before E-Commerce grew rapidly. Therefore he wondered why E-Commerce was being scapegoated. As if they were the only ones who were the cause. “The Tanah Abang wholesale market has experienced a decline since 2016, long before the pandemic. The market is usually busy before Eid. The relevant ministries have also predicted the same thing. "On the other hand, online trading is growing rapidly," said Bima, who is also CEO of Hijup.

Bima suggested that conventional traders not only blame. Traders must make changes and innovate, including venturing into the realm of E-Commerce in the true sense. "If traders in Tanah Abang still complain that it is quiet even though they have tried live shopping, we need to pay further attention. "Live shopping is just one way to sell, what is no less important is building a community and having lots of followers with good interaction," said Bima Laga to Edy Suherli, Savic Rabos, Irfan Medianto from VOI who visited him at the Hijup, an Islamic Fashion E-Commerce office in the Pejaten area, Pasar Minggu, South Jakarta, not long ago.

He also commented on the ban on TikTok Shops through Minister of Trade Regulation 31 of 2023, customer data security, healthy competition in the E-Commerce realm, tips for safe transactions and other issues in this realm. Here is an excerpt from the full interview.

Even though it is difficult for many parties, it turns out that, according to Bima Laga the Chairman of idEA, the COVID-19 pandemic has a positive side, making the growth rate of E-Commerce even more rapid. (Photo Savic Rabos, DI Raga Granada VOI)

What has the development of e-commerce in Indonesia been like in the last five years?

The development of e-commerce in Indonesia in the last five years, especially during the pandemic, has grown rapidly. During the pandemic, interactions and transactions are carried out online because we cannot meet or transact offline. The data we have from March 2020 to June 2023 shows that there have been more than 14.8 million MSMEs who have joined the idEA member platform. According to data from Bank Indonesia and Temasek, e-commerce growth has also reached around 30 to 40 percent year on year. Bank Indonesia's predictions for 2023 show that the value of e-commerce transactions could reach IDR 700 trillion. Based on Google and Temasek predictions, by 2030, the number of e-commerce transactions in Indonesia could reach 130 billion USD.

How fast is it developing?

Developments in the realm of e-commerce are indeed very rapid and dynamic. Although the estimate of 130 billion USD is the reference, it seems that this figure will be reached sooner than expected until 2030. God willing, we can reach it in 2025.

Regarding MSMEs, how many have joined the idea member platform and in the future how many targets will join?

Currently, there are around 22.8 million MSMEs that have joined. Our target by 2024 is to reach 30 million MSMEs. IDEA members currently consist of 220 e-commerce companies throughout Indonesia, including supporting companies such as banks, e-payments, logistics and social media platforms.

Some time ago, traders at the Tanah Abang market complained that their shops were empty due to the rise of e-commerce and social commerce, especially the TikTok Shop, which was finally closed. What's your response?

The Tanah Abang wholesale market has been experiencing a decline since 2016, long before the pandemic. The market is usually busy before Eid. The relevant ministries have also predicted the same thing. On the other hand, online trading is booming. During the pandemic, the situation at the Tanah Abang market got worse because most trade transactions were carried out online, because people could not make transactions offline. If traders in Tanah Abang still complain that it is quiet even though they have tried live shopping, we need to pay further attention. Live shopping is just one way to sell, what is no less important is building a basic community and having lots of followers with good interaction. Thus, good steps are needed to achieve success in live shopping. It is our collective duty to help them.

It currently uses a "hybrid" approach. The hybrid method is a way of changing offline transactions to online. My wife's experience when shopping at Tanah Abang market showed that the response was very slow, even though we wanted to order again. Merchants there need to adapt slowly and become more responsive so that buyers come back.

Indonesia, with its large population, is a very potential market for online trading. However, Indonesia still looks like a "rest area" for imported goods. What's your response?

Recently, I visited a headscarf production center in the Cakung area. Production there is very large, and some of them are local products that have joined this industry. This shows that we are able to produce ourselves with available raw materials and existing equipment. What needs to be done is to create added value through the brand. That way, Indonesia will not only be a place for imported goods. Regarding the flow of imported goods, there are several factors that influence it, such as licensing and taxes, which act as gatekeepers.

Regarding the pros and cons of Social Commerce that occur, especially on the TikTok Shop,  Bima Laga as the Chairman of idEA supports the government's policy of issuing Trade Regulation No. 31 of 2023. (Photo Savic Rabos, DI Raga Granada VOI)

E-commerce is indeed a place for trading, Social Media is now also used as a place for trading, people call it Social Commerce. So playing a dual role, social media and also trading, how do you see it?

We have to trace back, look at the history of the presence of e-commerce which is based on social media. In Indonesia, we know Kaskus which is one of the 9 e-commerce companies that founded idEA. Purchases can occur through the community. When we sell online, usually the first people to buy are our acquaintances because they trust us. The presence of e-commerce exists to facilitate this. In subsequent developments, social media underwent changes with the addition of payment and logistics features. This has led to the emergence of the term social commerce, where social media can facilitate payments and buying and selling transactions.

Because of the excitement, the government then revised Minister of Trade Regulation no. 50 of 2020 to become Minister of Trade Regulation no. 31 of 2023. This regulation will go hand in hand with innovation. In relation to e-commerce, regulations began to be implemented in 2009/2010, but were only regulated in more detail 10 years later through PP No. 80 of 2019. The revision of Minister of Trade Regulation No. 50 of 2020 to become Minister of Trade Regulation No. 31 of 2023 was carried out in response to dynamics in the field. Social commerce is growing rapidly, and the government feels the need to regulate everything.

So with the ban on TikTok as one of the big social commerce sites, what are your suggestions for the future?

We at idEA have provided input to the government. The government then issued regulations; Minister of Trade Regulation No. 31 of 2023. We appreciate the issuance of this regulation. As business actors who have legal entities, we must submit and comply with government regulations. We must understand that these rules are implemented to create competition and healthier trade. Currently, these rules apply as such, but future revisions may be necessary given the current dynamics. The world of e-commerce is very dynamic.

Production of goods in China is very efficient because it has long experienced industrialization. How to deal with it?

To deal with this, we must build added value through branding and marketing. Our MSMEs and producers must focus on this. When we talk about branding and marketing, we don't just talk about COGS (cost of goods sold), but also about how the brand and product value create COGS. Apart from that, we need to consider downstreaming. Now, with the new rules, it is not allowed to import goods with a value below 100 USD or IDR 1.5 million at the current exchange rate. When their goods can't come here, we have to facilitate them to build factories here. In this way, there will be investment and knowledge transfer from outside, so that an industrialization ecosystem can be formed here.

The government will publish a positive list, your response?

We positively welcome this government plan because it can increase downstreaming. However, care needs to be taken to ensure that there is no shortage of prohibited products, so that these goods can be produced domestically to avoid shortages and price increases.

In the realm of e-commerce, the market is very open and competition is very tight, especially for MSMEs, what can we do to face this?

To deal with this, MSMEs must build a strong brand and marketing strategy. This is not a job that can be completed in a short time. People have to see the product, try the product, believe it, and only then buy it. I myself sell hijabs, and the competition is very tight. All of this can be created through efforts to build a brand and gain customers.

The issue of customer data security in online commerce is an important issue, what about this?

We already have the Personal Data Protection Law, the rules regarding data security are quite clear. If there is misuse of data or data is leaked, action will refer to the PDP Law.

The originality of products sold on online stalls is often complained about, what about this?

I think the public is starting to become educated about this. However, sellers must be honest, if the item being sold is used, just tell them that it is used. If the question of originality is related to intellectual property rights. If there is a report about non-original items being sold, a stall can be asked to remove the item from their list. In terms of price, you can also see that there are original items whose price is usually around Rp. 1 million, but at a stall they sell it for Rp. 100 thousand, for example, which doesn't make sense.

E-commerce product delivery can have environmental impacts, such as plastic waste. Is there a concerted effort by idEA members to pay attention to this issue?

We must work together to protect the environment. Some of our members already have a system for packaging goods without too much plastic, the important thing is that the goods are safe. What is difficult to control are individual traders who still wrap it thickly because they are worried that their goods will be damaged. We, the government and all parties must diligently campaign for this.

E-commerce is susceptible to fraud by both sellers and buyers, are there efforts by the association to minimize cases of this fraud?

The marketplace already has a mechanism, funds cannot be disbursed if the buyer has not received the goods as promised. As a buyer, you must be alert, immediately complain if the goods you receive are not suitable.

Is our e-commerce already hosted in our own country?

I think our e-commerce has become a host in our own country. The issue of e-commerce from outside also spreading here is inevitable because we adhere to an open economic system. There are even neighboring countries that don't have local e-commerce. In the future, we will compete in a healthy manner by highlighting our respective strengths.

Bima Laga's Way in Enjoying the Beauty of Nature

Bima Laga as Chairman of idEA optimizes time on weekends for exercising and chatting with family. (Photo Savic Rabos, DI Raga Granada VOI)

After a week of busy work at the office and organizations. On weekends or holidays, the General Chair of the Indonesian E-Commerce Association (idEA) Bima Laga will optimize his time by enjoying the beauty of nature while exercising and relaxing with his family.

Bima deliberately chose outdoor sports activities that allowed him to freely admire and enjoy the beauty of nature. His sports choices are golf and cycling. "Especially if you can get time to play golf in the morning with a panoramic view of the mountains. While walking along the golf course with a beautiful landscape it feels very exciting. "I can enjoy and admire the natural beauty created by the Almighty," said the man who continues to develop Hijup as a pioneer of Islamic Fashion E-Commerce in Indonesia.

For cycling activities, because he lives in the Cibubur area, he just pedals his bicycle along the beautiful rural nature of Cibubur and its surroundings. “The villages there are beautiful and the views are also beautiful. "The point is, after cycling, you feel refreshed," said the CEO of Hijup.

When outdoor sports are not possible due to time constraints or other reasons, Bima chooses to exercise with his office colleagues and neighbors around his house. "With my office friends, the theme is usually futsal or mini-soccer. "Meanwhile, with the gentlemen in the neighborhood where I live, I will play badminton," said Bima, who has to maintain a rhythm of exercise so that his physical strength doesn't get too much.

Meeting Something

Even though he likes exercising, Bima Laga has his own control so as not to overexert himself when exercising. (Photo Savic Rabos, DI Raga Granada VOI)

From cycling to villages around Cibubur, Cilengsi, Jonggol and surrounding areas, Bima Laga actually discovered new places that he had previously never imagined. "Frankly, by cycling through villages and villages in Cibubur, Cilengsi, Jonggol and surrounding areas, I sometimes discover new, unique places, including culinary matters," said Bima, who once served as AVP Public Policy and Government Relations for Bukalapak and headed the division. Gojek Public Policy and Government Relations.

Bima, who struggles all day with the hustle and bustle of Jakarta, which is jammed here and there, feels refreshed when cycling with the still beautiful natural views of the village. "For me, it's refreshing from the busy schedule at the office from Monday to Friday. "After refreshing, when Monday we go back to our activities we will be fresh," he explained.

Bima also discovered something he couldn't find in Jakarta, such as culinary matters. But next time he found his favorite food. “I like chicken noodles. Sometimes you come across free-range chicken noodles that are no less delicious than chicken noodles in Jakarta. But often it is also uduk rice. "The point is, it's really exciting when it comes to culinary delights," he said.

Bima realized that he spent a lot of time working on weekdays. Weekends are the time to chat with family. “Incidentally, I also have an offline shop which is managed by my wife. After exercising, I usually go to the shop to accompany my wife while taking the children. "Weekdays I'm in the office, for weekends with my family," he said.

Bima is happy that his wife provides full support for his activities at the office and in organizations. "This is my second term as General Chair of idEA. Without the support of my wife and children it would not be possible to do all of this. "I thank you very much for all the support for me," he said.

Smart Shopping

Even though he likes exercising, Bima Laga has his own control so as not to overexert himself when exercising. (Photo Savic Rabos, DI Raga Granada VOI)

As an E-Commerce player, Bima Laga continually advises people who shop online to be thorough and thorough before making transactions. "If you want to buy the simplest thing, look at the rating of a stall or online shop that usually sells on certain E-Commerce. From there you can find out the quality of the market place. "Read carefully the testimonials of those who have shopped there," he said.

Apart from that, from the seller's side you can also see how much people believe in what he is offering. “Trust from the seller can be seen too. Is the item he is selling trustworthy or not? And don't hesitate to report unpleasant incidents. Because the market place will immediately act if a buyer is harmed by the seller. "They can ask sellers to remove certain items that buyers complain about," he stressed.

The more frequently you shop in the E-Commerce realm, Bima continued, the more buyers will understand whether what is being sold is good goods or not. Whether the service provided by the seller is satisfactory or not. “No matter how clever a person is at cheating, they will definitely be caught. The problem is that in the realm of E-Commerce, trust must really be maintained. If our reputation is bad, people will run away and move to another stall or seller. "Because of that, the market place and sellers must really guard it," stressed Bima Laga.

"We have to see that the regulations of Minister of Trade Regulation No. 31 of 2023 emerged to create healthier competition and trade. Now that the regulations are like that, it is not impossible that revisions will occur again in the future in line with developments that occur. The problem is that in the world of e-commerce, it is very dynamic,"

Bima Laga