In Indonesia, it is often said that “UMKM (Usaha Mikro, Kecil, dan Menengah: Micro, Small, and Medium Enterprises) support the economy.”

As such, the Indonesian government, local municipalities, e-commerce platforms, and various IT startups are supporting the development of micro, small, and medium enterprises through a variety of approaches, including digitalization.

In this article, we will focus on “mobile applications,” and based on the February 6 article from Republika.co.id titled “40 Ribu UMKM di Indonesia Telah Manfaatkan Majoo untuk Menjalankan Usaha” (“40,000 Micro and Small Enterprises in Indonesia Have Utilized Majoo to Run Their Businesses”), we will introduce the financial application “majoo,” along with other popular apps designed for micro and small enterprises.

64 Million Micro, Small, and Medium Enterprises in Indonesia

One in Every 4.3 People Is a Micro, Small, or Medium Entrepreneur

According to the Ministry of Cooperatives and SMEs of Indonesia, the country has approximately 64 million micro, small, and medium enterprises (MSMEs), accounting for 99% of all business units. These enterprises generate 60.5% of the national GDP and create 96.9% of employment opportunities.

Reference: Coordinating Ministry for Economic Affairs of the Republic of Indonesia – “The Continued Support of the Government for the Development of UMKM as a Critical Engine of the National Economy”

Indonesia has a population of approximately 274 million, with 64 million MSMEs. In contrast, Japan’s Small and Medium Enterprise Agency reports that the number of “small and medium-sized enterprises and micro enterprises” in Japan was 3.578 million as of 2016. This means that Indonesia, with 2.2 times the population of Japan, has 17.9 times as many MSMEs (assuming the number of enterprises equals the number of entrepreneurs).

Reference: Small and Medium Enterprise Agency of Japan – “Results of the Survey on the Number of Small and Medium-Sized Enterprises and Micro Enterprises as of June 2016”

The majority of Indonesia’s 64 million MSMEs are small-scale businesses operated by families or individuals, such as traditional food stalls and small shops known as “warung.”

Recently, however, the emergence of e-commerce platforms and social media shop features has made it easier to start a business without large capital or space. As a result, more entrepreneurs are venturing into new business styles beyond traditional stalls and warung.

The Needs of Micro, Small, and Medium Entrepreneurs

In Indonesia, MSME owners face a wide range of challenges beyond product development, such as sales, finance, and human resources management. Due to the small scale of their operations, it is often difficult for them to resolve these issues on their own.

To address these needs, technology-based services have recently gained popularity.

In particular, mobile applications are increasingly used by MSME owners who struggle with a lack of manpower or IT expertise, making them an accessible solution.

40,000 MSMEs in Indonesia Use Majoo to Manage Their Businesses

Amid this environment, the financial app “majoo,” designed for MSMEs, has made remarkable progress. In 2022, majoo supported the digitalization of over 40,000 MSMEs across more than 600 cities.

What is Majoo?

Image Source: Majoo – “Aplikasi wirausaha lengkap kelola bisnis jadi maju”

In Indonesian, “majoo” is pronounced “maju,” meaning “to advance” or “move forward.”

Founded in 2019, majoo Indonesia provides a mobile application that supports entrepreneurs—especially MSME owners—under the motto, “Evolving MSMEs through fintech innovation to promote the growth of Indonesia’s digital economy.” The monthly subscription fee for the app starts at IDR 129,000 (approximately USD 8.25) [Conversion rate: IDR 15,640 = USD 1].

The app includes the following features:

• Online Store Creation:
  Easily create an online store with a unique domain. Features such as homepage banners, product catalogs, inquiry forms, store maps, promotions, and WhatsApp chat are available directly through the app.
• Online Payment Functions:
  Supports various payment methods including e-money, debit cards, credit cards, and bank transfers.
• Attendance and Employee Management:
  In collaboration with BRI Bank, a shareholder in majoo, payroll functions will be added this year. These include salary calculation, payslips, and tools for salary payment integrated with bank accounts.
• Other Functions:
• Inventory Management
• Financial and Accounting Tools
• CRM (Customer Relationship Management)
• Business Performance Analytics

With these practical features, entrepreneurs can improve their business efficiency by up to 30%, according to majoo.

*References:

1. Republika.co.id – “40 Ribu UMKM di Indonesia Telah Manfaatkan Majoo untuk Menjalankan Usaha”
2. majoo – “Aplikasi wirausaha lengkap kelola bisnis jadi maju”*

Majoo’s Performance and Future Outlook

According to Mr. Adi Wahyu Rahadi, the founder and CEO of majoo Indonesia, the transaction volume through majoo reached IDR 2 trillion (approximately USD 127.86 million)* per month in 2022, marking an 80% increase compared to the previous year.
(*Conversion rate: IDR 15,640 = USD 1)

He assessed that majoo not only contributed to the efficiency of MSME operations, but also provided the flexibility needed to cope with social activity restrictions during the COVID-19 pandemic.

While many businesses struggled due to the pandemic and inflation, majoo’s strong performance highlights the rapidly increasing demand for digitalization and operational efficiency among MSMEs.

During the pandemic, much of daily life in Indonesia—including work, social interactions, shopping, and hobbies—shifted online, which in turn accelerated the digital transformation of MSMEs.

Reference: SWA Online Magazine – “Aplikasi Wirausaha Majoo Mudahkan Pembuatan Toko Online”

Though majoo currently serves 40,000 MSMEs, there is still significant room for growth given that Indonesia has over 64 million MSMEs.

Mr. Adi stated, “Our mission is to digitalize not only business units but also informal workers within those businesses and to provide inclusive financial services. Through this, majoo is expected to grow threefold compared to last year and to cover a wider market.”

Reference: Republika.co.id – “40 Ribu UMKM di Indonesia Telah Manfaatkan Majoo untuk Menjalankan Usaha”

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Applications Supporting MSMEs in Indonesia

In addition to majoo, there are various other applications in Indonesia that support MSMEs. Below are two notable examples:

Warung Pintar

Image Source: Warung Pintar

The term “Warung” means “stall” in Indonesian, and “Pintar” means “smart” or “intelligent.” Together, “Warung Pintar” refers to a “smart stall” or “smart shop” utilizing IT technologies. Currently, approximately 500,000 businesses are participating in Warung Pintar.

Warung Pintar is an inventory management app for stalls and grocery stores. Shop owners can purchase a wide variety of goods at low prices from various vendors without intermediaries and with free shipping. The app also offers financial management and other features.

In addition, Warung Pintar offers the following related applications:

• Grosir Pintar:
  An app that helps wholesalers acquire new customers and connect with retailers.
• Warung Pintar Distribution:
  Provides warehouse management systems and various inventory solutions. Users can monitor the entire distribution process through a single app using real-time dashboards and demand forecasts.
• Bizzy Connect:
  An app for brands and distributors to approach stall owners. It also offers marketing support.

Reference: Warung Pintar – “Tentang”

Buku Warung

Image Source: Buku Warung

“Buku Warung” (with “Buku” meaning book, notebook, or bank passbook) is a financial application with the tagline “Simple, Free, Secure.” It allows users to consolidate records of income, expenses, accounts payable, and product inventory into a single app.

The app includes digital payments, transaction records, automatic financial reports, debt tracking with automatic reminders for customers, inventory management, and notifications when stock runs low. It has been downloaded by more than 5 million users on the Google Play Store.

Reference: Google Play – “BukuWarung Aplikasi Untuk UMKM”

In addition to these, major e-commerce platforms and online food delivery services also support MSMEs by providing systems, features, and initiatives that make it easier for them to start or continue online businesses.

What is a “Warung,” the Symbol of Indonesian MSMEs?

Image Source: Warung Pintar – “Warung Kelontong dan Keberjalanannya Hingga Kini”

As a supplement, here is a brief explanation of the term “warung,” which also appears in the names of the aforementioned applications.

As mentioned above, a warung refers to a small shop such as an eatery or grocery store. Most are run by individuals or families, who often convert part of their house facing the street into a storefront or set up a food stall in front of their home or on rented space.

These shops typically sell daily necessities and consumer goods like bottled water, cooking gas, cigarettes, snacks, and may also handle fresh produce, toys, stationery, or even offer fried foods and drinks from a small cooking area.

Variations of warung include:

• Warkop (Warung Kopi): Coffee shops offering instant beverages, noodles, toast, and other light meals.
• Warung Nasi: Eateries serving rice and pre-cooked side dishes.

Such warungs are common in both urban and rural areas. The Indonesian government maintains strict barriers against the entry of small foreign retail chains in order to protect these small-scale businesses, which are represented by the warung.

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C2 (Participation in business meetings and purchasing goods): $230
C19 (After-sales service) / C20(Installation and repair of machinery): $300
D2 (Participation in business meetings and purchasing goods (1-year validity)): $380
E23/E24/E25 (Work VISA): $1,500

The Future of Indonesian MSMEs and Their Support Systems

When compared to the current situation in Japan, often symbolized by the term “shuttered shopping streets,” the MSMEs in Indonesia, including warungs, appear to be thriving.

During the COVID-19 pandemic, many restaurants located along main roads or inside shopping malls closed, whereas stalls and shops annexed to private residences—where rent is not required—and mobile food stalls without dine-in spaces often seemed to continue operating as usual.

That said, modern shopping malls, supermarkets, and convenience stores are also increasing in Indonesia. As people’s incomes rise, it is unlikely that small warungs in alleyways will remain unchanged indefinitely.

Paying close attention to Indonesia’s MSMEs and the diverse support initiatives provided by the government and private sector is essential for understanding the broader landscape of the Indonesian economy and business environment.