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Can Indonesia’s E-Commerce Take Opportunities During Pandemic?

Linh Pham

April 27, 2020

Since China confirmed Coronavirus for the first time around 4 months ago, the virus has spread rapidly across the globe. Including Indonesia, the case is gradually increasing day by day. As per today of 15 April, it hits over 5000 cases. The economic disruptions caused by the pandemic is reflected in volatility in the financial markets. Many areas of business are struggling, but there are opportunities for others to flourish. One of these areas is e-commerce, which could help the national economy stay afloat. As more businesses turn into online stores during this time, many people hope that e-commerce would be the one to keep the national economy back on track. As the physical stores closed, people start shifting their habits from offline shoppers to be online shoppers.

After Jokowi confirmed its first case of coronavirus in Indonesia, people were panic buying, and the supply of products was running out. Some companies, both small and large, were closed. While the demands are increasing, there is a concern that supply will not be able to meet it.

On the contrary, the purchasing power from the middle class decreased, because they currently do more savings. Meanwhile, the upper class were hoarding the groceries, and it will impact on the supply and prices. As a result of this, Indonesia’s e-commerce has a solution!

 

How is Indonesia’s E-Commerce Doing During The Outbreak?

As the government implemented the regulation of Large Scale Social Restriction (PSBB), e-commerce businesses are increasing sharply in use. The online traders on these e-commerce sites, such as Tokopedia, Bukalapak, Blibli, said that the orders had flooded since the regulation took effect. Because of the appeal of social distancing and staying at home, many people had abandoned physical shopping and moved to online shopping.

According to Katadata.co.id, the transactions on these sites, Blibli, Tokopedia, Bukalapak and Lazada have escalated dramatically, especially for fresh food products, vitamins, supplements, medical masks, hand sanitizers and medicines. Besides that, the increase of new users is quite significant, even reaching to double digits.

On the other hand, Tokopedia has closed down the mischievous online stores that take advantage of the current situation. Permanent closures are being enforced for those who are fraud or inflate the price. The users can also report these mischievous stores to help Tokopedia control the price, so they continue to sweep the stores that do not imply the regulations.

Meanwhile, Blibli has regulations to limit the purchase of this medical equipment, such as medical face masks, antiseptic, hand sanitizer and healthy snacks. Blibli also guarantees the availability of products, especially for daily needs and medical stuff.

The Challenges for Indonesia’s E-Commerce

One of Indonesia’s largest e-commerce companies, Tokopedia has closed thousands of stores that have been selling personal protective and health equipment at unreasonable prices on its marketplace during the pandemic. Medical masks, hand sanitizers, disinfectant sprays have been flying off the shelves since the outbreak first confirmed in Wuhan, China.

As the local manufactures stop operating, yet the orders are bulking across the world, it has made the items rare. Put in addition, the anxious customers start stocking up the items and put them online at high prices.

Tokopedia is also shifting its sales into food products and daily needs. They even have the campaign to push the household supply in 18 cities in Indonesia. You can directly go to your stores that are available where you live. It is much easier to utilize for users whenever they need household supply.

The Great Opportunities Happen For These E-Commerce Players

Since everybody stays at home, most of them will shift towards online purchasing to avoid public places. Social distancing, the hassle of dealing with crowds and lines, have been frustrating for people and choose to do online shopping.

The services such as home delivery and such e-commerce sites will flourish. The pattern of purchasing online will likely continue even after the pandemic, this clearly would be advantageous for e-commerce.

The transactions made on the marketplace have been surging, the most sought after products are masks, antiseptics, hand sanitizers, disinfectant sprays, and healthy snacks. Also, the other e-commerce, such as Bukalapak, Blibli, Lazada, Shopee, and Jakmall are shifting their main sales, from electronics or other products such as groceries, to fulfil customers daily needs.

The partnership between this e-commerce and the local restaurants have successfully been completed. As many restaurants had evolved to online selling to maintain their revenue. Such as, Boga Group closed down their physical restaurants, now they sell ready to cook on its marketplace. Then followed by, Holycow has done the same thing, and many other restaurants.

Tokopedia has worked together with the logistic services to offer free shipping for customers to remain at home. The customers can shop their daily groceries online, and the items will be delivered at their doorstep in no time. The Tokopedia’s free shipping is indeed tackling the obstacle of the logistic issues, which shipping cost and delivery times might be difficult to fulfil their needs.

The Never-Ending Supports From Them

Tokopedia had launched a campaign called “Tokopedia Peduli Sehat” to support the users by providing the recommendation for the best healthcare products. With this campaign, In March 2020, Tokopedia gained sales value of Masks increased by 197 times, New Sellers in Health & Personal Care category increased by almost 2.5 times, while the transactions increased by almost 3 times, especially in Health & Personal Care category.

Indonesia’s e-commerce is having the campaign to support offline businesses migration to operate online, to support the local economy, as known as #JagaEkonomiIndonesia. They also provide a 100% discount on the service fee for all sellers in specific categories.

The closure is, no one can predict what will happen nor when will it be ended. The impact of coronavirus is truly vigorous, and many people get quite sick of this, but we have no choice, other than to react and adapt to this situation.

Eventually, all are hoping the pandemic will be over soon, and the businesses will grow once again. This time is to make small adjustments in response to the shift shoppers needs while preparing for a return to normal.

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