New platform for Indonesian SMEs to target Greater China garners investments too

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JAKARTA, IDFinancials – Indonesia’s trade ministry has set up a digital marketplace to help small and medium enterprises (SME) sell their products especially to China, Hong Kong and Taiwan.

Trade Minister Muhammad Lutfi said the IDNStore or Indonesia Store aims to facilitate business-to-business (B2B) and business-to-consumer (B2C) activities between Indonesian businesses and potential partners and buyers in the three destinations.

While IDNStore targets Greater China, people in other parts of the world can also buy or do business with Indonesian businesses on the platform.

“This is the right moment for all Indonesian small and medium-sized enterprises (SMEs) that are export-oriented to optimize the use of digital platforms to improve their export performance. Accelerating the use of technology has proven to be an effective and efficient tool to promote export products, especially during the COVID-19 pandemic,” Lutfi said in mid-January when launching the platform officially.

Soft launched earlier in November, IDNStore has attracted more than 1,000 SMEs. They are offering thousands of products from various categories such as agriculture, automotive, food and beverage, clothing, health and beauty, handicraft and home decor.

Within a short time, the platform has also made some investment achievements. It attracted investments in dragon fruit and banana plantations in Indonesia with investors wanting to export the fruits to markets in China, Japan, Saudi Arabia, and the United Arab Emirates, said Lutfi.

“In addition to optimizing efforts to penetrate the market to China and its surroundings, this platform also acts as an incubator as well as a benchmark for Indonesian SMEs to target export markets in other regions,” the trade minister added.

The trade ministry also reported that three Indonesian SMEs using IDNStore successfully exported their first food products to Hong Kong on Dec. 7 last year. Currently, products that are commonly purchased include processed food products.

IDNStore boasts an innovative virtual exhibition feature and QR Code to support sellers when carrying out virtual promotions. The platform is available in three languages – Indonesian, English and Mandarin.

Kasan Muhri, director-general of the National Export Development at the trade ministry, said the IDNStore can optimize efforts to penetrate markets in Greater China, helping exporters to gain access to online buyers or trading partners.

“Another reason for the launch is to target markets that could not be reached through conventional promotional activities for various reasons, including the COVID-19 pandemic,” Kasan told IDFinancials.

Before the formation of IDNStore, there was no dedicated Indonesian e-commerce platform that helped local SMEs sell their products abroad.

Indonesian e-commerce unicorn BukaLapak has a BukaGlobal channel that promotes Indonesian SME products to several countries such as Malaysia, Singapore, Brunei Darussalam, Hong Kong and Taiwan, but not to Mainland China, which is a far bigger market.

Piter Abdullah Redjalam, economist and research director of the Center of Reform on Economics (CORE), noted that e-commerce giant Tokopedia and Bukalapak have so far concentrated their businesses in the domestic market. Also, they use only the Indonesian language on their platforms. In addition, most of their goods are imported, which are not the right ones for overseas markets.

However, IDNStore specially focuses on export-quality Indonesian goods that are made with the “wealth of Indonesian resources”, Redjalam told IDFinancials.

Meanwhile, the supporting transaction systems and logistics services that have joined IDNStore are quite diverse and cater to the preferences of buyers in Greater China.

The payment companies include credit cards, Paypal, WeChat Pay, AliPay and Union Pay, while the logistic partners include Tabitha Express, Janio, SEG, and PT Pos Indonesia, said Kasan.

Meanwhile, Chinese e-commerce giant Alibaba.com, another player in Indonesia, is targeting to bring up to 5,000 Indonesian merchants onboard by 2025, a five-fold increase from its current register. It boasts more than 14 million active customers from more than 190 countries.

During a webinar in December, Victoria Chen, director of Alibaba’s global gold supplier premium membership program, said the company would help more Indonesian businesses go online and go global.

Indonesia’s non-oil and gas exports to China, Hong Kong and Taiwan have grown by more than $2 billion over the past two years.

During the period of January-November 2020, such exports to them amounted to $31.46 billion, with China accounting for $26.61 billion. Figures for the same period in 2019 were $29.43 billion, with China accounting for $23.59 billion.

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