Digital MSMEs eCommerce Portfolio KoinWorks Records Positive Trends
As a fintech platform, KoinWorks sees that this positive trend is also in line with the trends that occurred in several SME sectors during the Covid-19 pandemic, especially in the eCommerce sector which is one of KoinWorks’ specialties.
The Covid-19 pandemic has had a significant impact on many sectors in the world and Indonesia. One of them, this pandemic has accelerated the acceleration of technology and the digital economy.
Google, Temasek & Bain Consultancy recently released research highlighting that Indonesia’s digital economy during the pandemic continues to grow as seen from the total GMV of eCommerce Indonesia, which increased 54% YoY in 2020.
“The positive growth trend in the SME Digital eCommerce segment in the KoinWorks portfolio is recorded as having a healthy and growing performance, although some may still not recover to pre-COVID-19 performance levels with expectations of recovering to growth conditions in 2021,” said Benedicto Haryono as Koinworks CEO & Cofounder in an online interview session, Us (19/11/2020)
As of October 2020, it was noted that the eCommerce SME segment in the KoinWorks portfolio continued to show a trend of sales transaction growth of up to 19 percent every month.
“Looking at data from Google’s research, Temasek & Bain Consultancy as well as our internal portfolio data, KoinWorks believes that the financing we channeled through KoinP2P to the SME Digital eCommerce segment and several other selected segments will continue to score positive performance in this New Normal era,” said Benedicto.
Chance to Recover
He also expressed his optimism that the digital SME sector in Indonesia has a very good chance of recovering until it reaches a condition of business transaction growth like before the pandemic. According to KoinWorks’ internal data, the digital SME sector in the eCommerce segment recorded steady growth, some of which even grew significantly during this New Normal period.
The SME Digital category, which previously experienced a decline in transactions such as the Fashion category, during the New Normal period has also shown improvement in growth until it has returned to normal with an increase in performance of up to 17 percent in October 2020.
In addition, the data also shows the uniqueness of SME transactions in the eCommerce segment in the New Normal era, such as how Herbal supplement products in the Health / Healthcare SME category experienced a 200 percent increase in transactions.
Transactions in the Hobby category have also experienced an average increase of 12 percent every month since June 2020, with the most sales in gardening products, sports equipment, and bicycles and their accessories.
Trends in Changing People’s Behavior
These data are of course also in line with the trend of changing people’s behavior in Indonesia in the midst of a pandemic, namely farming and sports activities, especially cycling, which are currently in great demand.
Reflecting on the positive performance and performance in the SME Digital sector in the KoinWorks portfolio, the company continues to make mentoring efforts, especially for Digital SMEs, which are still constrained by the impact of the pandemic.
70-85% of businesses are expected to recover after restructuring. Despite the restructuring, Benedicto assesses that lenders will still get investment returns. This is calculated with an average yield of 14-25% per year, depending on the loan portfolio.
“Compared to the maximum potential loss of 10%, it is quite profitable. It depends on whether they have suitable diversification or not,” he said. In addition, companies have tightened the loan application process to minimize the risk of bad credit.
One way to do this is by focusing on targeting business actors who are digitizing their business. “Loan distribution has increased by 30% on a monthly basis (month to month / mtm). We hope that December or January 2020 will return to pre-Covid-19 levels,” he said.
Meanwhile, for gold investment services or KoinGold, transactions grew by more than 300% to IDR 2 billion per month in the third quarter. Then, the disbursement of salary through KoinGoji reaches IDR 150 million every month. With an average value of IDR 3 million to IDR 10 million per employee.