Mr Muhammad Ilham Nugroho1
1Universitas Gadjah Mada, Sleman, Indonesia
Indonesian Small and Medium Enterprises (SMEs) are not prominent actors in Indonesia’s apparel export industry. It is widely known that Indonesia’s large apparel industries dominate exports to global market and global supply chains. With the presence of e-commerce, SMEs have opportunities to be competitive. This paper explores strategies for SMEs in Indonesia’s apparel industry to sell into global markets and participate in global value chains driven by the internet. The key constraints to get into global market include ability to go beyond the domestic market despite significant demand provided by large population, limited access to foreign buyers and small role played by Indonesian government. It is found that exports via e-commerce are likely to face many difficulties, still it is possible to sell their products abroad on a small scale. Global value chain framework helps to assess this emerging market. E-commerce has altered upgrading mechanisms, particularly in process, functional and end-market upgrading, which enables SMEs to get into the global market. Furthermore, the framework determines reasons why Indonesian institutional context prevent digitally-led exports from growing rapidly.
Muhammad Ilham Nugroho is a master’s student of Graduate School of International Relations, Universitas Gadjah Mada. He is currently researching the dynamics of Indonesian textile and garment industry, focusing on improvement of export perfomance and market diversification through internet for midstream and downstream industries.