Bridge to Global Market for Indonesian MSMEs

The penetration power of micro, small, and medium enterprises (MSMEs) is being increasingly expanded and strengthened into local-national and even global markets. Various instruments, ranging from online shopping platforms, the use of artificial intelligence, to face-to-face interactions with international buyers, serve as the bridge.

The Digital Market (PaDI) for MSMEs was established approximately five years ago, precisely on August 17, 2020. This online shopping platform, which connects state-owned enterprises with MSME actors, was initiated by the Ministry of State-Owned Enterprises (BUMN).

In addition to being a marketing page, PaDI UMKM is also a place for electronic procurement of goods (e-procurement). PaDI UMKM also facilitates financing with a guarantee of unpaid bills (invoice financing or factoring).

"Currently, PaDi UMKM accommodates 54,500 MSMEs, 1.9 million MSME products, and 12,000 buyers. The total transactions have reached IDR 58 trillion," said Deputy Minister of State-Owned Enterprises Kartika Wirjoatmodjo at the Ministry of Trade's (Kemendag) synergy event with the Ministry of State-Owned Enterprises to Develop Export-Ready MSMEs at the Kemendag office, Jakarta, Monday (24/2/2025).

The UMKM rice initiative is one of the triggers for the Ministry of Trade to synergize with state-owned enterprises. This synergy is outlined in a memorandum of understanding (MoU) that includes cooperation in strengthening domestic supply chains, as well as enhancing human resource capabilities, business development, and financing scheme support. The MoU was signed by Kartiko and Deputy Minister of Trade Dyah Roro Esti Widya Putri.

Kartika added, for the past five years, the Ministry of SOEs has helped grow MSMEs in Indonesia through mentoring, financing, and opening wider market opportunities. Not only through PaDI MSME, but also various programs of state-owned companies.

PT Bank Rakyat Indonesia (Persero) Tbk, for example, focuses on the development and financing of micro businesses. Meanwhile, PT Bank Negara Indonesia (Persero) Tbk encourages small and medium enterprises to be able to export through the Xpora program.

By 2025, we are targeting exports of MSME products to those 33 countries at 18.84 billion US dollars, an increase of 12.54 percent from 2024.

Roro said, this year, the Ministry of Trade is rolling out the UMKM Dare to Innovate, Ready to Adapt Export or UMKM BISA Ekspor program. Various forms of activities include export training, design clinics, UMKM digitalization, trade promotions, and exploring business cooperation.

In export promotion and exploring business cooperation, the Ministry of Trade seeks to optimize the role of trade representatives in 33 countries. These countries can be targets for expanding the market for MSME products.

"In 2025, we are targeting exports of MSME products to 33 countries of 18.84 billion US dollars or an increase of 12.54 percent from 2024," he said.

Roro added that MSMEs are the backbone of the Indonesian economy. The sector contributes 61 percent or Rp 9,580 trillion to Indonesia's gross domestic product.

Through the UMKM BISA Ekspor program, UMKM is expected to increasingly contribute to the absorption of labor and national economic growth. Specifically, the program also supports the national export growth target of 7.1 percent by 2025.

BPS noted that in 2023, the number of Indonesian MSMEs was 66 million MSMEs. Of that number, 24.56 million MSMEs or 37.79 percent have entered the e-commerce ecosystem. As many as 10.3 million MSMEs or 15.7 percent have been able to export to the global market.

Not only that, the Ministry of Trade even provides a special stage for MSMEs at the 2025 Trade Expo Indonesia (TEI). The 40th international trade exhibition will be held at the Indonesia Convention Exhibition (ICE), Bumi Serpong Damai, Tangerang Banten, on October 15-19, 2025.

Trade Minister Budi Santoso and Coordinating Minister for Economic Affairs Airlangga Hartarto launched the plan to hold TEI 2025 on February 20, 2025. This year, the exhibition carries the theme "Discover Indonesia's Excellence: Trade Beyond Boundaries".

According to Budi, TEI 2025 will showcase Indonesian products in three zones. The three zones are the Food, Beverage and Agricultural Products zone; Manufacturing Products, Services, and Lifestyle; and the UMKM BISA Ekspor Pavilion. "The UMKM BISA Ekspor Pavilion is one of the differences from previous exhibitions, he said.

The Ministry of Trade targets that TEI 2025 will be attended by 1,500 participants and visited by 30,000 visitors, and can attract 5,000 buyers from within and outside the country. The total transaction is targeted to reach 16.5 billion US dollars. This target is higher than the TEI 2024 target of 15 billion US dollars. In TEI 2024, the transaction realization reached 22.73 billion US dollars.

In the launch, Airlangga requested that TEI 2025 transactions could reach 25 billion US dollars. This is important to improve the performance and contribution of non-oil and gas exports to national economic growth.

Based on BPS data, the value of Indonesia's oil and gas and non-oil and gas exports throughout 2024 reached 264.7 billion US dollars, up 2.29 percent annually. Of that amount, the value of non-oil and gas exports was worth 248.83 billion US dollars or up 2.46 percent.

Indonesia's trade balance in 2024 also had a surplus of US$31.04 billion. This surplus was triggered by a non-oil and gas trade surplus of US$51.44 billion, although it was corrected by an oil and gas trade deficit of US$20.4 billion.

BPS also noted that throughout 2024, the Indonesian economy grew by 5.03 percent. This figure is lower than the 2023 economic growth of 5.05 percent and below the government's target of 5.2 percent. Meanwhile, exports grew by 6.51 percent, but still below imports which grew by 7.95 percent.

To boost MSMEs' contribution to exports, the Ministry of Trade is also working with Google Indonesia's Gemini Academy. One of them is by training MSMEs to utilize Gemini, Google's artificial intelligence (AI).

Director General of National Export Development of the Ministry of Trade, Fajarini Puntodewi, said that in 2025, the Ministry of Trade and Gemini Academy will train Indonesian MSMEs to use AI. This training targets MSMEs with export potential, basic-level export MSMEs, and advanced-level export MSMEs.

With AI, they can, among other things, find out the potential of domestic and foreign markets, buyer desires, examples of various attractive packaging designs, product price composition, and even their competitors.

"Through the training, UMKM players are expected to be able to utilize AI for business development. With AI, they can, among other things, find out the potential of domestic and foreign markets, buyer desires, examples of various attractive packaging designs, product price compositions, and even their competitors," he said.

In one of the training sessions held on February 21, 2025, for example, UMKM actors were provided with four Gemini functions in business development. The four Gemini functions are as a partner in collecting ideas and solving problems, a source of inspiration, sparking creativity, and supporting productivity.

CEO and founder of Hepi.Inc and also a Google Academy mentor, Agnes Aprilia, said that business people can make Gemini a conversation partner. For example, related to business opportunities, market potential, products that consumers are interested in, to getting inspiration for business logos and attractive product packaging.

This is inseparable from Gemini's function as a partner in collecting ideas and solving problems (brainstorming) and a source of inspiration. Gemini can also spark creativity and support the productivity of business people.

He gave an example, Gemini as a brainstorming partner can be invited to talk to find a list of export destination countries that are suitable for an MSME product. This can also be supplemented with a request to find a suitable market share in a number of countries for an MSME product.

In addition, business people also often face a number of long and complicated reports and regulations. As a productivity support, Gemini can help analyze and summarize these documents.

“Talk to Gemini. He will not misunderstand and be emotional. However, whatever Gemini produces, we should not swallow it raw. Manage and sort it out well according to needs, because we are the ones who play the role of decision makers,” said Agnes.