The enormity of the pandemic effect: MSMEs and Decacorn Start-Ups are Together Struggling
It is undeniable, everybody racked their brains to survive in a pandemic that is full of uncertainty about when it will end. Decreasing turnover has caused small business fighters to decacorn to have the courage to make decisions that have never been over it before.
The Indonesian Minister of Cooperatives and MSMEs, Teten Masduki, said that based on the results of a survey conducted by several agencies and the Ministry of MSMEs, the Coronavirus outbreak had a major impact on the sustainability of MSMEs. As much as 47 percent of micro-businesses. small and medium enterprises (MSMEs) had to go out of business because they were affected by the Covid-19 coronavirus pandemic.
The government has prepared a budget of IDR 15.36 trillion for the distribution of Direct Cash Assistance (BLT) for Micro, Small, and Medium Enterprises (MSMEs). This assistance targeted 12.8 million business actors and was provided to reduce the impact of the Covid-19 pandemic on the MSME sector. The amount of assistance which is also known as the Micro Business Productive Assistance (BPUM) is IDR 1.2 million.
To get this assistance, business actors can register with the Office of Small and Medium Enterprises Cooperatives in their respective Regencies / Cities.
Recently stated by the Deputy for SMEs of the Ministry of Cooperatives and MSMEs that since the Covid-19 pandemic in Indonesia, there has been an increase in the number of online transactions by 26%. Meanwhile, MSMEs that have not been connected to digital platforms have experienced a decline in turnover.
Research results from the Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) in 2020 noted that 42.1% of online shop consumers reported an increase in spending during a pandemic.
Along with the Covid-19 Pandemic, increased spending occurred on health consumption, hobbies, and bills. There was a 44.3% increase in spending on online stores for essential products such as masks, health products, and food. Meanwhile, for hobbies, there was an increase of 14.6% and bills of 19.5%.
During the pandemic, the increase in child consumption occurred in products related to games or games, reaching 32.8%. Meanwhile, health products increased by 35.8%, and bills increased by 14.5%.
The Covid-19 pandemic has shaken the country’s giant retail business. Economic activity that has not yet recovered due to the social restriction policy has resulted in a decline in the income of large retail operators amid high operating costs.
Food retailer, Giant, has closed outlets in Depok and Kalibata. Its director said that PSBB has influenced store operations and customers have changed their shopping behavior and demand patterns for their products.
In 2021, Matahari Department Store also plans to close 13 outlets and there are still 10 outlets under supervision for the possibility of being closed out of a total of 147 outlets throughout Indonesia.
Due to PSBB regulations that are enforced in many regions in Indonesia, 33 KFC outlets at airports and stations have been temporarily closed.
The director of Fast Food Company said that compared to the 2020 target, there was a decrease in visitors of around 4% to 5%. Not only that, but COVID-19 also affects the turnover of his restaurant. In this case, Justinus said there had been a decrease in turnover of less than 10% since the outbreak of the coronavirus broke out.
Another news from Gojek, the first decacorn from Indonesia, did not escape the devastating impact of the COVID-19 pandemic. Decacorn is a status pinned to startups with a valuation of more than 10 billion US dollars. Gojek has held this status since last year. Gojek also recently announced that it is getting funding from Facebook and Paypal. This is a series of capital injections from world-class giants such as Google, Tencent, as well as the Indonesian manufacturing giant, PT Astra International Tbk.
Gojek’s co-CEO stated in an email that was distributed to all of his employees, about Gojek’s layoff plans for its 430 employees or around 9%. The decision was the result of the closure of 2 GoLife services: GoClean and Go Massage, plus the GoFestival service. Gojek decided to close down non-core businesses that were suspended due to the pandemic. The hope, the company can survive for a longer time, amid all the economic uncertainty.
Let’s pray together so that the world will get well soon.
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