June 6, 2023

Ryan Manafe, CEO and cofounder of Dagangan.

There is no denying that social commerce has been growing at a breakneck pace globally. A $1. 2 trillion industry , social business uses the power associated with social networks and communities to buy plus sell goods. This new way of commerce has been pivotal in providing access and empowering those in parts of the world that may not have easy access to the particular most basic necessities. In Southeast Asia, social commerce is poised to be a $13 billion industry alone, and in Indonesia, where I sit, the industry continues to be growing by 55% annually . I believe that social commerce will be pivotal in not just transforming how micro, small and medium enterprises (MSMEs) do trade but critical in uplifting the economy and its people.

To put it into perspective, being the particular fourth most populous country in the world, Indonesia’s MSMEs make up 61% of the country’s GDP . They are local business owners, many associated with whom are mothers plus daughters. In fact, over 60% from the 37 million MSMEs were managed simply by women within tier-3 and tier-4 markets in 2018. The number may be even higher now, with almost 65 million MSMEs recorded as of 2021. These female business owners tend to be severely underserved and, on a daily basis, need to run the particular shop while supporting plus raising a family. Often, it is a struggle in order to put food on the table.

There have been a few common challenges to solving these pain points. For one, digital penetration is still very low. There will be also a lack of trust in using electronic platforms and tools. Given poor infrastructure, MSMEs are usually faced with higher prices plus challenges in order to creating enough market volume.

Local entrepreneurs catering to their tier-4 villages may need to close up shop for a day when they run out of inventory to stock up at the nearest warehouse. Ironically, despite the explosion of e-commerce in Southeast Asia, this is a familiar story throughout Philippines and other emerging marketplaces.

Zooming out, you can learn the lot from markets like China, which today is a $374 billion dollars industry. For example , Pinduoduo, a Chinese web commerce behemoth today, pioneered rural e-commerce, which usually brought products from Chinese farmers to consumers. When Pinduoduo first started, this built a robust supply and distribution system and network across various markets. Coupled with group community buying online, they quickly established themselves as the particular champion with regard to rural ecommerce, empowering more than 16 million farmers to nearly 900 mil consumers on the platform.

Similarly, Southeast Asian countries are beginning to harness community in order to build trust and educate MSMEs, which ultimately supports financial inclusion and sustainability. I believe the right model to support is a combination of tech-enabled facilities and local community building to create a network effect that will increase quantity and decrease price.

For instance , my company employed a hub and spoke model. Suppliers send items to hubs or basically distribution centers placed throughout rural areas. A tech-enabled approach using AI plus machine learning allows route optimization and inventory monitoring that MSMEs may need so that company owners can receive their goods delivered directly to them within the next day at an affordable cost. Additionally , the price remains affordable whenever demand is usually aggregated across many business people. This helps small business owners focus their time on running their businesses and upskilling in finance and digital.

On the individuals front, it’s still the more hands-on approach and a community effort, where trust still needs to become built directly with MSMEs to make the leap to making use of technology to scale. Community leaders or local influencers are crucial in spreading word of mouth. Resellers also play a role in building trust plus educating the particular local areas.

I’ve seen the real impact social commerce can play in empowering these types of rural neighborhoods and their business owners—many of whom are women entrepreneurs. With increased adoption, I also see greater opportunities regarding social commerce to bring financial independence and inclusion.

Catering Your Business To MSMEs

There are a few key strategies that will organizations can use to build a sustainable and resilient digital economic climate that empowers rural residential areas and facilitates the growth of MSMEs.

Enhance digital skills and literacy: By providing training and education programs in order to help individuals and companies in countryside areas develop digital abilities, you may help build trust in the digital economy and increase adoption of digital technologies.

Increase digital connectivity: By improving internet system and access to technology in non-urban areas, you can make it easier for MSMEs to connect with customers and partners, which can help build have confidence in and increase their reach.

Implement purposeful technologies: By identifying and implementing purposeful technology that addresses the specific needs associated with MSMEs within rural places, you can assist improve their own business operations and increase their efficiency, which could help develop trust plus increase their particular customer base.

Foster collaboration: By fostering collaboration and partnerships between MSMEs in rural areas and other stakeholders in the particular digital economic climate, you are able to help build believe in and boost adoption of digital systems.

In the current macro economy, tech startups need to focus on providing simple solutions that help little and moderate enterprises (SMEs) in countryside areas enhance their income plus revenue. These businesses may face challenges due to the economic downturn, and interpersonal commerce players can perform an essential role in helping them weather the storm and come out stronger on the other side.

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