Melting Global Impact With Local Focus: Indonesia's E-Commerce Continues To Empower MSMEs

Illustration. (Photo: Pixabay)

JAKARTA - Along with the rapid growth of e-commerce in Indonesia, many local companies are attracting the attention of international partners. The process of joining global companies is often considered a strategic step to increase market capacity and reach. However, this has also raised concerns about the impact on the company's commitment to local markets and MSMEs.

One of the concerns that arises is the dependence of e-commerce platforms on international partners, which could lead to operational instability if global partners face problems or make policy changes. In addition, excessive focus on the global market can result in neglect of domestic consumer needs and preferences, as well as a decline in product quality or services in local markets.

To deal with these concerns, attention from all parties, including governments, large companies, and MSMEs, is urgently needed so that e-commerce growth not only provides global gain but also supports local market developments.

Nailul Huda, Director of Digital Economy at the Center of Economic and Law Studies (CELIOS), expressed a positive view of this dynamic.

Our e-commerce market is still quite largely controlled by foreigners. The presence of foreign investors will certainly enliven the presence of foreign investors in our digital ecosystem. However, we must see this as an opportunity to strengthen the local sector by utilizing innovation and technology brought by international partners. As an open company, the presence of foreign investors who are able to improve the company's performance is certainly not a problem, as long as the existing rules remain obeyed," he said, in a written statement, Wednesday, August 21.

Nailul Huda also added that the most important thing is how to keep imported goods from getting heavier into the Indonesian market.

The government needs to issue regulations regarding tagging goods on online commerce platforms, both in local and social commerce. This will make it easier for us to identify imported goods and establish related policies. In addition, the application of special consumption taxes and restrictions on discounts on foreign products will support local products, while at the same time spurring the growth of domestic MSMEs," he explained.

Cooperation between local e-commerce companies and international partners does not have to change the positive direction that already exists. Many local e-commerce companies joining global companies are able to create synergies between technology and local sensitivities. This approach allows them to strengthen local identity while leveraging global resources for mutual progress.

According to INDEF's research in December 2023, of the 254 MSME respondents, 83.46 percent revealed the lack of labor skills in the use of digital platforms, and 96.46 percent experienced intense competition between business actors on digital platforms. On the other hand, collaboration with global companies provides better access for MSMEs to a wider market and advanced technology.

Innovations such as analytic tools help local business actors understand market trends and consumer preferences, while training and support from e-commerce companies can increase operational efficiency and MSME business skills.

A real example of this is Tokopedia, which joined ByteDance in early 2024. With ByteDance support, Tokopedia introduced innovative features such as live shopping, which allow business actors to interact directly with consumers via live-streaming videos, and continue to support the Local Buying movement.

Data shows that the MSME sector contributes about 61 percent to Indonesia's Gross Domestic Product (GDP), and more than 97 percent of the country's total employment opportunities are absorbed by MSMEs. Support and access to the global market through the e-commerce platform provides a significant boost to the growth of this sector.

With the right strategy, international cooperation can serve as a bridge between local and global markets, improve the welfare of small business actors, and strengthen the increasingly connected local economic position in the world.