COVID-19 – Indonesian MSMEs’ sales drop by nearly 95 percent

Jakarta (Indonesia Window) – The Micro, Small and Medium Enterprises (MSMEs)’s sales in Indonesia has declined by 94.69 percent during the COVID-19 pandemic, according to a survey conducted by the Indonesian Institute of Sciences (LIPI).

The survey was conducted by online on May 1 – 20, involving 679 valid respondents whose main incomes were from businesses.

“The COVID-19 pandemic has caused a significant decrease in business profits as production costs remain steady or even increase, while sales declined. Business costs that have increased during the pandemic are among others for procurement of raw materials and spending for transportation as well as payment for workers,” Head of the LIPI’s Economic Research Center Agus Eko Nugroho said in a webinar on Monday (June 29), as quoted from the LIPI’s website.

The survey collected 54.98 percent of micro business players, 33.02 percent of ultra-micro, 8.1 percent of small businesses and 3.89 percent of small business players.

Based on the duration, respondents who got involved in the survey were those who have been in business for 0-5 years (55.2 percent), 6-10 years (24 percent), and more than 10 years (20.8 percent).

Most businesses aged 0-5 years are on the ultra-micro scale (58.36 percent) and micro scale (58.33 percent).

In addition, the survey also considered variations in sales methods used by business actors, namely door-to-door 41 percent, physical stores 34 percent, via agents/resellers 32 percent, on market places 15 percent, and online sales via social media 54 percent.

The survey shows that during the pandemic, sales that decreased by more than 75 percent have been experienced by 49.01 percent of ultra-micro businesses, 43.3 percent of micro businesses, 40 percent of small businesses, and 45.83 percent of medium businesses.

Meanwhile, based on the duration, sales that decreased by more than 75 percent have been experienced by businesses aged 0-5 years (23.27 percent), businesses aged 6-10 years (10.9 percent) and businesses for more than 10 years (8.84 percent).

Based on the sales method, sales that declined by more than 75 percent has been experienced by 47.44 percent of offline/physical businesses, 40.17 percent of online sales businesses, and 39.41 percent of businesses using both offline and online sales methods.

Reporting by Indonesia Window