2 Technology Startups Collaborate to Help MSMEs Export
Micro, small and medium enterprises (MSMEs) are a very dominant business model in Indonesia, but their opportunities to engage in global trade are still very small.
Quoting from the website of the Ministry of Cooperatives and SMEs, 86% percent of export players are big businesses. The contribution of MSMEs to exports is still relatively low, at 14.37%, and is still lagging behind APEC countries which can even reach 35%.
Chinese MSMEs, for example, are able to reach buyers in any country to sell various non-technological products such as belts, children’s toys, apparel, and so on at affordable prices.
According to data from the Central Statistics Agency (BPS), 64 million MSMEs contribute 60% to Indonesia’s total gross domestic product (GDP) and absorb 97% of the workforce.
However, the value of Indonesia’s exports is dominated by large companies. SMEs find it difficult to penetrate the export market due to various obstacles, including logistics.
MIND and Shipper Startups Focus on Helping MSME Digitization
A number of startups have been present to help open access to the export market for Indonesian MSMEs, for example, the logistics startup Shipper Indonesia (Shipper) and the import-export e-commerce site MadeInIndonesia.com (MIND).
Recently, they collaborated to increase the penetration of Indonesian MSMEs in the export market. MIND provides one-stop services for exporters or importers including banking matters, export insurance, logistics companies and verification and certification services.
On the other hand, Shipper strengthens end-to-end logistics and warehousing services to increase global expansion and trade opportunities for Indonesian businesses, especially MSMEs, abroad.
As part of the cooperation agreement, Shipper will manage and operate MIND’s warehouse specifically for export purposes. With this warehouse management, it is hoped that the product distribution process available on the MIND platform can be processed better and faster.
The founder and COO of Shipper Budi Handoko hope that this collaboration can support MIND in supporting logistics needs. Shipper is designed to provide wider and more equitable access to quality logistics services throughout Indonesia, especially for SMEs.
“We hope that this collaboration can further strengthen the business of both parties and can increase the volume of Indonesia’s exports,” said MIND founder and CEO, Ilyas Bhat, Thursday (19/8/2021) yesterday.
According to Budi Handoko, founder and COO of Shipper, his company is designed to provide wider and more equitable access to logistics services throughout Indonesia, especially for MSMEs.
“Shippers provide fulfillment and delivery services through a network of centers, delivery partners and digitally managed retail points,” said Budi.
Shipper utilizes digital fulfillment technology solutions in managing its warehousing in more than 200 locations with a total area of nearly 600,000 m2 throughout Indonesia. This Shipper’s warehousing operations have received ISO 9001:2015 Quality Management System Certification.
Shipper has also partnered with more than 40 freight forwarders for shipping goods domestically and internationally. Cooperation like this, if it goes well, can help local MSMEs in the logistics sector and encourage exports.
The Digital Economy Improves Amid the Pandemic
The digital economy sector has experienced a tremendous increase in recent times and the momentum of digitalization is a tremendous opportunity that wants to provide more convenience and increase the contribution of MSMEs to exports.
“Through this partnership, we hope that MSME players can find their independence in exporting,” said Ilyas.
At the “500,000 New Exporters Conference” in Jakarta some time ago, the Minister of Cooperatives and SMEs Teten Masduki said that Indonesia could produce new exporters, especially SMEs with global competitiveness.
However, achieving this goal is not without challenges. The lack of logistics infrastructure in Indonesia makes the competitiveness of business actors, especially national MSMEs, low.
The current government continues to build the National Logistics Ecosystem (NLE) and invest in infrastructure to create connectivity so that distribution problems and other logistics issues can be minimized or even eliminated.