Tanah Abang Market has for many years been known as a distribution center for textiles and textile products (TPT) to various regions, ranging from Sumatra, Kalimantan, Sulawesi, to Papua. Many traders from various regions bought TPT at Tanah Abang Market to resell in their regions. But now, the situation is reversed. The market that was once known as the largest trading center in Southeast Asia is now empty of buyers. Many Tanah Abang traders have been left behind by buyers and even customers, from selling on a large scale to being able to sell even a few pieces. The Indonesian Market Traders Association (IKAPPI) even revealed that there is a phenomenon of traders in the Tanah Abang Market going out of business one by one. The textile traders are suffering the same fate as many textile traders in traditional markets in Indonesia. Due to the deserted condition of the Tanah Abang Market, the traders revealed, of course it caused a fairly drastic decrease in turnover, which could even reach more than 50 percent for the decline in turnover.
Traders in Tanah Abang Market Switch to Selling Online
The condition of Tanah Abang Market, which is increasingly deserted by buyers, has made many traders in the wholesale center finally sell online. Arnold, for example. This batik cloth merchant admitted that the quietness of Tanah Abang had occurred after Lebaran Haji at the end of June 2023 yesterday. This condition makes him have to rack his brains to get more profit, one of which is by selling online, especially in e-commerce such as Shopee and Tokopedia. Although for now selling retail batik cloth is still profitable, he does not deny that selling wholesale in stores is more profitable because purchases are usually made directly in large quantities. “If we calculate wholesale (selling offline), wholesale is still bigger. For example, if we have B2B (business-to-business), we have business partners. We sell materials, meaning that someone who sells ready-made clothes takes materials from me, it’s clear that they take more,” he said. Meanwhile, another Tanah Abang Market trader named Desi admitted that she has been fully selling online since a year ago. When she switched to selling online, she also moved her shop to the upper floors to get cheaper rent. This was done because of the increasingly quiet market conditions. However, Desi still opens a shop in the market just to store and pack her merchandise.
Minister of Cooperatives and SMEs Says About the Causes of the Lonely Tanah Abang Market
In this regard, Minister of Cooperatives and Small and Medium Enterprises Teten Masduki visited Tanah Abang Market on Tuesday (19/9/2023) to gather input from traders. According to him, traders in Tanah Abang are ‘battered’ because of the onslaught of imported products that are sold very cheaply online. In fact, the quality of Indonesian products is no less good than these imported products. “There is indeed a flow of goods entering Indonesia, consumer goods that are very cheap so that local products do not compete both offline and online,” said Teten. Responding to this phenomenon, he assessed that what needs to be regulated is the flow of goods and ensuring that goods entering Indonesia are illegal or not. Teten suspects that the government is still too lax on imported products. In fact, he said, President Joko Widodo advised all his ministers that there should be no more imports for products that can be produced locally. Teten promised to take a number of actions to help traders in Tanah Abang, such as tightening the rules for imported goods and also exploring rules for online trading. “It needs to be regulated whether the goods sold are accompanied by legal documents or not. Such as SNI, halal license, or other permits. So we can prevent the sale of online products that have the potential to hit domestic products,” said Teten.
Digitalization, Competitiveness, and the Importance of Business Legality
In the context of Indonesia, digitalization has a big impact, both negative and positive. If not supported by good regulations, digitalization will pose a threat to domestic economic actors. Minister of Cooperatives and SMEs Teten observed that traders in Tanah Abang Market experienced a decrease in turnover of more than 50 percent on average. Yes, he revealed, even though the traders have transformed in selling by marketing their products online, it is still difficult for some of them to increase their business turnover again. “So the issue is not that offline traders are inferior to those who are online, but how MSMEs that have gone online must have competitiveness and encourage local products to grow and develop,” he said. Yes, as for the current free market era, empowerment is needed so that MSME players such as traders in the market can face competition and digital transformation. Therefore, support is needed for them both in terms of payment, digitalization, and legality. This is because there are still many traders in the market who are informal and do not have legality, making it more difficult to enter the digital ecosystem. In fact, legality also provides a number of benefits for traders, such as:
- Provide legal certainty and protection
- Provide assistance for business development
- Provide easy access to financing
- Provides convenience in empowerment
In response to this, the government through the Ministry of Cooperatives and SMEs has prepared various programs for the digital transformation of MSMEs, including data collection, training and guidance, procurement of business incubators on campus, and making it easy to take care of legality and making company identification numbers. The ease of obtaining legality for MSMEs is also supported by the cooperation between the Ministry and PT Legal Tekno Digital or Kontrak Hukum. Teten said that the cooperation with Kontrak Hukum is an effort to ensure the ease of transformation of MSMEs, one of which is the ease of legality:
- Establishment of a business entity,
- Business license,
- Certification
- BPOM distribution permit, up to
- Intellectual Property Rights (IPR).
Moreover, Kontrak Hukum is the first digital legal service platform in Indonesia that provides reliable, affordable, and fast legal services.
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Well, especially for KH friends who want their MSMEs to successfully go digital, then don’t forget to fulfill business needs such as legality, marketing, and finance! This is important for business development and increasing buyer confidence.
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To fulfill these various business needs, Sobat KH does not need to bother hiring a team because you can do it with Kontrak Hukum. With the Digital Business Assistant (DiBA) service, you can get the most complete business services ranging from legal, financial, to tax services in just one place with Kontrak Hukum’s DiBA. For service information, please visit KH Services – DiBA page. If you have questions about other business or MSME needs, you can consult for free at Tanya KH or via direct message (DM) to Instagram @kontrakhukum.
