Spurring Household Spending

KOMPAS/CYPRIANUS ANTO SAPTOWALYONO

Screen display when Minister of Trade Agus Suparmanto is the keynote speaker at a seminar in the National Retail Day network: Optimizing National Market for Global Experience, on Wednesday (11/11/2020).

Household spending fell 4.04 percent in the third quarter of 2020 as the people’s growing worries about income and job security had caused a delay in consumption.

JAKARTA, KOMPAS— The COVID-19 pandemic has accelerated the shift in buying behavior from offline shopping to online shopping. To accommodate the change in buying patterns, the retail sector is encouraged to undergo a digital transformation.

Retailers have been advised to carry out electronic trading or e-commerce transactions and provide delivery services and electronic payment systems.

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"E-commerce must be carried out by retailers to maintain performance and develop business, especially during this pandemic,” Trade Minister Agus Suparmanto said in a virtual seminar on National Retail Day called Optimizing National Market for Global Experience on Wednesday (11/11/2020).

In Indonesia, household spending contributed 57.31 percent to gross domestic product (GDP) in the third quarter of 2020. During the July-September 2020 period, household spending fell 4.04 percent while the country’s economy shrank 3.49 percent.

Efforts to spur consumption have been made by a number of e-commerce sites by holding sales promotion activities during special dates such as Nov. 11 or 11.11 big sales.

The annual event, which has been carried out since 2012 by the Indonesian E-Commerce Association (idEA), will be joined by 250 online retailers.

Sales promotions have begun to appear ahead of the National Online Shopping Day (Harbolnas), which will be held on Dec. 12, 2020. The annual event, which has been carried out since 2012 by the Indonesian E-Commerce Association (idEA), will be joined by 250 online retailers.

According to the director of Shopee Indonesia, Andhika Jahja, many residents have taken advantage of the 11.11 sales promotion to shop, which has led to a surge in transactions on online marketplaces.

KOMPAS / LASTI KURNIA

Workers are busy welcoming the National Online Shopping Day 12.12, seen in the stock room of the body care manufacturer Beauty Barn, at Kebun Jeruk, Jakarta, Wednesday (11/12/2019).

Dillah Abdullah (24), a resident of North Jakarta, delayed sleep until early Wednesday morning to be able to buy items at big discounts. She bought powder, lipstick and various beauty tools for only about Rp 162,000.

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Tamara Selvira (23), a resident of Bandung, West Java, took advantage of the 11.11 sales promotions to buy personal items. She also took advantage of free delivery services offered by the e-commerce platforms.

The executive director of the Indonesian Center of Reform on Economics (Core), Mohammad Faisal, said that Harbolnas was an important event to boost the consumption of the middle-upper class in the midst of a recession. "Online shopping has actually become the choice of some people during the pandemic. During Harbolnas, people are expected to be more motivated to buy thanks to the promotional offers and discounts," he said.

Trust

During the National Retail Day Seminar, Nielsen Indonesia Executive Director Wiwy Sasongko said that the deterioration of the economy due to the Covid-19 pandemic had caused a decline in consumer confidence since April 2020.

"They are worried about their income, whether it will be the same as before. They are also worried about the security of their jobs,” said Wiwy. Because of this concern, many people had postponed the purchases of certain products, causing a decline in retail business.

Wiwy believes that the resumption of economic activities will help consumers to shop more confidently. However, the opening of economic activities must be sustainable and during a pandemic, retailers must focus on aspects of digitization, promotion and optimization of stocks.

KOMPAS/ALIF ICHWAN

Residents choose grocery items that are sold online in the context of Jakarta, Monday (9/12/2019).

The chairman of the Association of the Indonesian Retailers (Aprindo), Roy N. Mandey, said retailers would continue to carry out their activities during the pandemic in a bid to help restore the national economy during the pandemic.