SME in Indonesia is no doubt a growing sector in the country’s economic ecosystem. The rise of SMEs is mostly due to the increase in the number of Start-up companies. Around three years ago, the number of investments from foreign and local venture companies pours massively into the Start-up market in Indonesia. The investments have successfully propelled companies to become regional Giants. This further causes an exponential rise in the number of SMEs. However, the growth stops when the Covid-19 pandemic occurs.
Many SME in Indonesia experience turmoil as social restrictions apply and the demand for goods and services decrease. Business activities in Indonesia slow down tremendously as one by one, business begins to suffer the consequences. Companies can no longer sustain their operations which cause employees to lose their jobs. The country’s economic condition suffers along with the SMEs.
SME in Indonesia and the Struggles
SME in Indonesia is experiencing a lot of struggles during this pandemic period. Many have to close their operations due to the lack of income and the ballooning costs. Furthermore, with the social restrictions, some companies are prohibited from operating at all. This makes it difficult for SMEs to offer their goods and services to possible customers.
Aside from the customer access troubles, the nation’s economic troubles also impact customer buying behaviour. A customer that can casually shop for goods becomes much more reluctant to spend their money. The increase in the unemployment rate also causes more people to lose their income source which affects their buying behaviour. SMEs that relies on small and middle-income buyers suffers heavily from this.
In addition, despite the government efforts in providing economic stimuli to the micro-companies, the result is unsatisfactory. The financial aid for SMEs in Indonesia does not arrive at the destination as hoped. Plus, not all companies receive financial aids. The lack of stimuli and the unfavourable condition further proves to be a hurdle for SME in Indonesia.
Opportunities and Potential Outcomes
Even though the pandemic situation is generally complicated for SME companies to sustain their operations, recent development in Covid-19 cases has caused social restrictions to ease down. Today, the number of Covid-19 cases in the city has decreased substantially. The low number of Covid-19 cases prompts the Government to allow shopping centres and offices to open. This situation is beneficial for SMEs in Indonesia as business activities are now able to operate at a minimum of 50% rate.
With these improvements, more entrepreneurs are beginning to grasp business opportunities. This is easily seen by the growing number of inquiries and requests at MESO Serviced and Virtual Office. There has been a surge of clients requesting a company establishment and virtual office service. These requests can be a good indicator for SMEs health in Indonesia. Most of these clients are in the field of trading and construction services.
Export and imports businesses are starting to see a movement as well. Nation borders are now open for export and imports, albeit some restrictions still apply. SMEs in Indonesia that work in the export and import industries are beginning to see hope. Shops are now back to restocking their products, while service companies are back to offering their services.
On the other hand, although slower than the local companies, foreign companies are beginning to resume their operations and expansion plan in Indonesia. Most foreign companies that invest in the country will be working on industries that are rising in demand. SMEs in Indonesia must grasp this chance by observing the trend and executing a business plan to capitalize on that information.
Baca juga: Mendirikan PT PMA di Indonesia
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