Paxel Survey: Social Media is Still More Used by SMEs Selling Online

Paxel has just released its first report titled Buy & Send Insights. This report highlights the behavior of online seller SMEs in the e-commerce industry and their perception of the industry logistic in Indonesia.

paxel worked closely with data analytics company Provetic in the preparation of this report. There are 535 respondents who participated in this survey which are divided into three categories of business maturity.

In detail, 33 percent of respondents are categorized as beginner sellers or have been selling for less than 1 year. Then 33 percent are categorized as experienced seller or selling 1-2 years. Lastly, as much as 34 percent veteran sellers selling for more than 2 years.

The results of this survey show that up to now social media is mostly used by SMEs as a medium for selling compared to e-commerce platforms or e-commerce platforms marketplace As many as 87 percent of respondents recorded using more than one social media platform.

Meanwhile, WhatsApp (84%) and Instagram (81%) are the applications that dominate the use of social media to sell online. The rest is followed by Shopee (53%), Facebook (36%), Tokopedia (29%), and Bukalapak (18%).

From the seller category, this report divides three categories of sellers who open their business through social media and e-commerce. For those who sell only through social media, it is divided from beginner sellers (44%), experienced seller (32%), and veteran sellers (24%). 

Meanwhile, SMEs that market their merchandise through social media and e-commerce platforms are dominated by veteran sellers (42%), experienced seller (34%), and beginner sellers (24%).

Other data also reveals that physical store ownership in the digital era is no longer relevant for SMEs. This is because as many as 66 percent of respondents think that the income from online stores has exceeded the income from physical stores.

"If we look at it, as many as 83 percent of our respondents do not have a physical store, 17 percent still maintain a physical store, and 14 percent have a physical store before selling online," said COO Paxel Zaldy Ilham Masita at the Paxel Buy and Send Insights Press Conference, Wednesday ( 2/10).

Turning to the logistics side, Zaldy said that these online sellers are increasingly relying on logistics services on the same day aka same day delivery. This is illustrated by 36 percent of respondents who want speedy delivery rather than cheaper costs (29%), easy delivery (26%), and a system live tracking (8%).

Services same-day delivery at the moment dominated by Paxel (75%) who favor this delivery concept in Java and Bali. The rest, as many as 24 percent of respondents think same-day delivery accommodated by online motorcycle taxis.

"As an illustration, the online business model in Indonesia and the United States is very different. Here [delivery] is decentralized or dispersed, while in the US it is centralized in warehouse. This is what makes logistic coverage so important," said Zaldy.

Therefore, through this research, Zaldy seeks to better understand SMEs that run online businesses, including how they market and ship merchandise. Because according to him the behavior of SMEs in Indonesia continues to change.

On the same occasion, Provetic Senior Analyst Smita Sjahputri assessed that there are a number of factors that make SMEs prefer to use social media to sell online.

First, the average delivery volume of online sellers is still small, so social media features make it easier to communicate and transact with buyers. Second, social media is easier to use because it doesn't have complex features like e-commerce or e-commerce marketplace.

"If the transaction volume increases and is ready to scale up, they just moved to e-commerce or marketplace. Moreover, small business actors cannot immediately withdraw the money from the sale if they use it on an e-commerce platform," he said.

Throughout early 2018 to September 2019, Paxel has pocketed one million package deliveries from 519 thousand users. This delivery has been supported by 1.200 couriers spread across Java and Bali.

Currently, Paxel storage lockers are available in 110 locations and are targeted to reach 300 locations by the end of this year.