CPA Australia: Strong customer focus leads to speedy recovery for Indonesian small businesses

• COVID-19 the biggest challenge
  confronting Indonesian small businesses in 2020.
• Established e-commerce and
  online delivery services helped businesses shift online quickly.
• Seventy-six per cent of surveyed Indonesian
  small businesses expect to grow in 2021.

JAKARTA, INDONESIA – Media OutReach – 30
March 2021 – Although many small businesses in Indonesia
were adversely impacted by COVID-19 in 2020, a strong focus on online sales and
customer satisfaction should lead to a rebound in small business activity in
2021, according to CPA Australia.

 

CPA Australia’s Asia-Pacific Small Business
Survey, published today, shows the percentage of small businesses in Indonesia
that grew dropped to a record low of 58 per cent in 2020, compared with 87 per
cent in 2019. During the year, 52 per cent of respondents sought external funds
for business survival, the highest of the 11 Asia-Pacific markets surveyed.
Indonesian small businesses were the second most likely to identify COVID-19 as
the biggest challenge to their business in 2020, at 68 per cent.

 

Mr Herwan Ng, a member of CPA Australia’s
Indonesian Advisory Committee said, “Small businesses in Indonesia experienced
a particularly tough 2020, with COVID-19 leading to extensive restrictions on
movement. This disrupted regular business operations and significantly impacted
their revenue.”

 

However, business confidence is building, with
76 per cent expecting their businesses to grow in 2021, the third highest
result of any region in the survey.

 

“Small businesses in Indonesia have a very
strong focus on their customers. Customer satisfaction has been one of their most
important influences for them for the past three years. Customer-centric
strategies allow small businesses to stay actively engaged with their customers
even in the face of the pandemic. This makes it more likely that they will
rebound in 2021,” Herwan said.

 

The survey revealed that 53 per cent of small
businesses in Indonesia used social media to communicate with existing
customers, one of the highest of the markets surveyed. Further, more than half
(58 per cent) of small businesses in Indonesia earned more than ten per cent of
their revenue from online sales last year. Thirty-eight per cent of Indonesian
small businesses either began or increased their focus on online sales in
response to COVID-19. 

 

“Well-established e-commerce platforms and online
delivery services enabled many businesses to shift their products or services
to online quickly, while maintaining a close relationship with their
customers,” Herwan said.

 

Investment in technologies, such as mobile
apps, is one way for Indonesian small businesses to rebound post-COVID. This is
reflected in 74 per cent of respondents reporting that their business
investment in technology in 2020 had improved their profitability, which was
much higher than the survey average of 48 per cent.

 

“To win over more customers, small businesses
should continue to invest in technology, accelerate e-commerce adoption and
maintain strong communication with customers through social media,” Herwan recommended.

 

The innovative culture of Indonesian small businesses
is reflected in 31 per cent of respondents stating that they will introduce a
new product, process or service to Indonesia or the world, higher than the
survey average of 23 per cent.

 

The increasing use of technology means that
Indonesia’s small businesses should have a stronger focus on cybersecurity.
While 64 per cent expect to experience a cyberattack in 2021, only 43 per cent
have reviewed their cybersecurity in the past six months.

 

“With government policies to develop the digital
economy and encourage the adoption of payment technologies, we foresee that
Indonesian small businesses will stay competitive. Nonetheless, Indonesia’s
small businesses should pay attention to cybersecurity protections as they
digitalise.” Herwan suggested. 

 

CPA Australia recommends that Indonesian small
businesses consider the following actions to improve their recovery prospects:

• Seek advice from a trusted adviser, such as an accounting professional.
• Focus on improving customer
  satisfaction.
• Increase use of social media, being
  mindful of changes in customers’ behaviour.
• Pay attention to debt ratio and the
  cost of external finance.
• Investing in up to date devices and
  relevant technologies.
• Enhance cybersecurity protections and
  review business’s IT systems regularly.
• Explore new opportunities to diversify
  and expand.