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CHALLENGES & OPPORTUNITIES FOR MICRO-BUSINESSES IN ACCESSING DIGITAL COMMERCE IN JAKARTA, INDONESIA

Janine Grant Issue Brief No. 3/2020 September 2020 By: Mulya Amri

1. Introduction

In the Jakarta metropolitan area many micro-sized vendors sell fresh produce on pushcarts or in small stalls in wet markets. Physical proximity restrictions due to the COVID-19 pandemic have taken a toll on their income as they cannot visit buyers’ houses, nor can the buyers visit them in the markets. They lack online access to consumers and their supply chain is also disrupted.

E-commerce platforms are touted as a solution that would connect vendors, large and small, with buyers regardless of location. It is also among the simplest and easiest ways for consumers to help keep micro-enterprises alive. But digital adoption is not as straightforward as many had expected, even in the Jakarta metropolitan area, where ICT access is much better than in many other parts of the country. While the country has seen rapid adoption of information and communications technology among micro-, small-, and medium-sized enterprises (MSMEs), there is the question that if digitalization enables greater business opportunities, why aren’t more micro-enterprises adopting this strategy?

This report explores challenges associated with the adoption of online platforms (digitalization) by micro-businesses, especially during the COVID-19 pandemic, using Jakarta as a case study. The research intends to analyze the challenges and opportunities of digitalization for micro-businesses and how a model that incorporates the role of online platforms might be developed.


2. Background and Objective of the Study

The COVID-19 pandemic has impacted people’s mobility and public behavior in cities. According to the Google Mobility Report for April 2020 (Figure 1), the large-scale social restrictions policy in Jakarta has greatly reduced people’s mobility. After the government decided to loosen the restrictions policy in June 2020, people’s mobility increased but no significant difference was observed (Figure 2). This condition has affected many micro-sized vendors, who rely on physical transactions with buyers through traditional pushcarts in the streets or wet markets.

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