With fewer people traveling and visiting shops or shopping centers, the retail sector has experienced a drastic decline in income. Indonesian Shopping Center Managers Association (APPBI), reported by the Jakarta Post (28/5/2020), said that 190 malls were temporarily closed during the implementation of the PSBB. The mall closure lowers consumer visits, reducing the retailer’s income by up to 98% (Bisnis Indonesia, 18/5/2020).
The retail sector has also been hit hard in terms of its employment. The implementation of the PSBB resulted in the number of workers being laid off to reach 400 thousand people, according to Katadata (2020). The workers’ layoff is due to the inadequate retail business activity during the pandemic. Changing consumption trends have shifted retail businesses towards online or e-commerce, which will practically reduce employee needs.
The third panel of Services Dialogue Week showed us that COVID-19 Pandemic shifted consumer behavior, mostly shopping and consuming. Even before the pandemic, Indonesia already has 175 million internet users that can be an opportunity to elevate E-Commerce. The pandemic pushed more merchants to join E-Commerce. Transactions in the marketplace rise, usage of an e-wallet as a medium of the transaction also grows. To maintain the rising importance of E-Commerce, we need to nurture the ecosystem using a regulation that still gives room for innovation.
However, there is still a lot of room to improve in Indonesia’s E-Commerce scene. The scene needs to be more dispersed, as E-Commerce still revolves around Java. Also, many MSMEs impacted by the pandemic need to be assisted in joining online platforms. Furthermore, equal treatment with foreign competitors needs to be maintained. We also need deregulation so that complex obligations and permissions will not burden local e-commerce merchants. Lastly, as many of other countries did, incentives for e-commerce is much needed. Digital transformation does not mean that offline outlets should be abandoned but can be done by adding new sales channels and expanding their marketing targets through online or online outlet options.