Implementation of Digital Marketing in Micro, Small, and Medium Enterprises (MSMEs) in Indonesia During the COVID-19 Pandemic

In Indonesia, micro, small, and medium enterprises (MSMEs) cover nearly 90% of the business entities and become the backbone of national economic growth. However, during the COVID-19 pandemic, they encountered challenges in their marketing, which impacted their sales volume. Jember Regency has the highest number of MSMEs in East Java, Indonesia, and is renowned for agro-industry products such as peanut cookies (Kue Kacang). However, most MSMEs in Jember are lacking in applying digital marketing. It is not in line with the acceleration and development of the technology and information flows in 4.0, which has required MSMEs to adapt to these developments in their business. The purpose of this study was to reveal the implementation of digital marketing and the obstacles encountered in improving their sales performance. This study applied a qualitative approach. The research data was collected through semistructured in-depth interviews, observation, and documentation. The informants involved in this study are business owners of peanut cookie MSMEs in Jember. This study found that they use the owner’s private account on Facebook and WhatsApp as their primary digital marketing platforms, while others used Instagram and TikTok. Surprisingly, none of them used e-commerce platforms such as due to their cluelessness with the system. In addition, the shortage of input production during the peak season has been a recurring issue for decades. Further, the result discovered that digital marketing makes it easier for MSMEs owners to communicate with consumers, provide information, and expand the market during the COVID-19 pandemic.

I. Introduction

Micro, Small, and Medium Enterprises (MSMEs) have an essential role in the Indonesian economy. In September 2021 Ministry of Finance of the Indonesian Republic stated that “Based on data from the Ministry of Cooperatives and Small and Medium Enterprises (KemenkopUKM) in March 2021, the number of MSMEs reached 64.2 million with a contribution to the gross domestic product of 61.07% or IDR 8,573.89 trillion. MSMEs can absorb 97% of the total existing workforce and can collect up to 60.42% of the total investment in Indonesia [1]. This statement indicates the vital role of MSMEs in Indonesian economic growth. Apart from being a contributor to the national gross domestic product, MSMEs also have a role in Indonesia’s economic recovery.The absorption of a large workforce with relatively smaller business capital and fairly cheap product prices has caused MSMEs to become more flexible in adapting to economic shocks. Eventually, the Indonesian Ministry of Cooperatives and SMEs collaborated with the Indonesian Ministry of State-Owned Enterprises to improve the absorption of MSMEs products through two schemes, one of which is through the digital market [2].