Complicated Competition, Many Small Merchants Die When Switching Online Sales

Illustration. (Photo: Doc. Antara)

JAKARTA - Founder & Chairman of MarkPlus, Inc. Hermawan Kartajaya said that many small traders' businesses died when they switched to digital or online markets. According to him, this was due to the unpreparedness of traders in preparing infrastructure and improving the quality of their merchandise.

To be successful in buying and selling online, said Hermawan, traders must have their own differences or characteristics for their products. Because, in the online commerce process, many competitors offer the same goods.

"Now online, don't think that competition is easy, it's even more complicated," he said during an online discussion in Jakarta, Thursday, July 29.

Furthermore, Hermawan said that in order to survive in online buying and selling, traders must make deep innovations in their products. This preparation must be done carefully before starting a business.

Not only that, the ability to sell is also the main benchmark in starting a business. Because, the bigger the market entered, the bigger the company organization must be and accompanied by a lot of capital and assets.

Hermawan likens small traders who die in selling online like people who cannot swim but are plunged into the ocean. The traders do not know how much they are capable of doing business.

"So the retailer himself must know the size (business size) that is sufficient for him, how not to take too many," he said.

Based on data from the Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM) in 2020, the success rate of people's businesses in selling on digital platforms is around 5 percent. One of the reasons is that business actors have difficulty in obtaining raw materials and additional capital.

This condition was exacerbated by the outbreak of the COVID-19 pandemic, which hit 60 percent of micro, small and medium enterprises (MSMEs). This is because demand decreases during the outbreak of the epidemic.

In fact, as is known, MSMEs have been able to become the backbone of the national economy by absorbing 97 percent of the workforce. In addition, this people's business also contributes to 60 percent of the national gross domestic product (GDP).