Indonesia’s modest fashion sales hit by post-election riots, social media blocks in run-up to Eid
Photo: Riot police officers stand guard as people shout during a protest across the Election Supervisory Agency (Bawaslu) headquarters following the announcement of the last month's presidential election results in Jakarta, Indonesia, May 22, 2019. State-owned retailer Sarinah can be seen in the background. REUTERS/Willy Kurniawan
JAKARTA - Indonesia’s modest wear companies faced disruptions in sales last week during the post-election riots when the government partly blocked access to social media.
The government from May 22 to 24 limited access to several features on social media platforms such as WhatsApp, Facebook and Instagram, causing users to experience very slow connections for uploading of photos, videos and voice messages. Users on Wi-Fi and VPN mobile data services were not affected.
Communications minister Rudiantara said the restrictions were necessary to contain the spread of fake news and hoaxes. The riots were an escalation from what started as protests and demonstrations on May 21 following an announcement by the General Election Commission confirming that President Joko Widodo had beaten his opponent in the recent election.
Tania Ray Mina, who sells for the brands Zaskia Mecca (ZM) and BIA, said she lost around 60 percent of sales on social media during the riots as customers could not send or receive photos due to network errors.
“We also received notification from Ramayana (an offline retail partner) that sales dropped,” Tania told Salaam Gateway.
“We held a bazaar in PRJ Kemayoran last week, and we could barely see any visitors due to the riots.”
Sales for ZAM Cosmetics, a halal skin care and cosmetics company she co-founded, also dipped.
“Sales also dropped for ZAM Cosmetics because we lost the momentum last week from Tuesday to Wednesday, and Thursday was the worst,” she said.
Sales for ZAM Cosmetics normally surge three to four times during Ramadan compared to regular months, said Tania, who started the company in 2017 with her sisters, one of whom is popular actress Zaskia Adya Mecca.
A robochat feature the company introduced to replace personnel has also helped contribute to the increase in sales.
“At first we had six admins but three of them quit. We then built the website to replace their role but the website didn’t convert into sales and it became a loss for us, where sales dipped around 30 percent to 40 percent since they left,” said Tania.
“The problem was, unlike the robochat, our admin tends to stop working at 5 p.m, which is when most of our customers make interactions and transactions with us,” she said.
Ida Leman, a veteran modest fashion designer, said the riots and social media restrictions hit her gross revenue by 50 percent last week due to the lack of access to post photos and run promotions.
“Ramadan this year is different because of the riots,” said Ida.
“Buyers are not in a calm state of mind,” she added.
She normally receives 20 orders that add up to around 40 million Indonesian rupiah ($2,780) in a normal week in Ramadan. Ida also promotes her collections offline.
Another designer, Restu Angraini who founded ETU modest wear, said the riots last week also affected her business as social media platforms are still the company’s primary sales channels. She struggled to interact with her customers, she said.
“There are still many customers that are more comfortable doing transactions via chat in WhatsApp, Line and Instagram,” Restu told Salaam Gateway.
It was a big loss, she said, especially as last week was the penultimate week for customers to shop before most Indonesians start their journeys home for Eid.
However, ETU’s overall Ramadan season has been healthy. Restu said demand during Ramadan normally doubles for ETU compared to other months when the business sells around 30,000 pieces.
ETU sits in the middle-low segment, selling from around 200,000 ($14) to 300,000 rupiah ($20) per piece.
OMNI-CHANNEL, EARLY SALES BEAT RIOTS
But not all companies were hit hard.
Ria Miranda said its omni-channel approach provided other avenues for customers.
“It indeed affected our chat commerce but it wasn’t significant as we also focused on other channels like websites and apps,” Arief Tri Satya, Chief Operating Officer at Ria Miranda, told Salaam Gateway.
“Our customer interaction via WhatsApp experienced lags, but there were also other options, like using VPN,” he added.
Ria Miranda started introducing new tech features early this year to boost sales. Following the launch of its mobile app, the company also started a robochat feature on its official website in March.
“We are very interested to see how this works out and we believe this feature should increase our sales,” said Arief.
“We know in the 24/7 era customers want to make everything fast and right, and we hope the robochat and its analytics feature will solve that problem.”
Ria Miranda has so far tripled sales to 60,000 pieces during Ramadan, according to the company.
“Our sales in the last several years have tended to increase during Ramadan,” said Arief.
Ria Miranda’s price point is mid-range, selling for around 600,000 rupiah ($41) to 2 million rupiah ($140).
Like Ria Miranda, Anggia Handmade was also not hit as hard by the riots and social media restrictions.
Founder Anggiasari Mawardi attributes this to loyal, repeat customers and early sales.
According to her, Anggia Handmade’s Ramadan collection sold out before the start of the fasting month, which only left the company the work of production and distribution.
“Honestly sales have exceeded my expectations,” said Anggiasari.
“Alhamdulillah the riots and social media restrictions didn’t affect me because our business stakeholders or customers already made their orders or bookings since the beginning of this year,” she said.
Anggia Handmade sold 250 to 300 pieces more than last Ramadan when it shipped 500 pieces. Its clothes are priced from 250,000 rupiah ($17) to 3.5 million rupiah ($235).
BRICK-AND-MORTAR SHUTDOWN
While social media-focused businesses plodded on during the riots, Indonesia’s oldest state-owned retailer was forced to shut its doors from Tuesday to Friday.
Sarinah is located across the road from the Elections Supervisory Agency headquarters that was targetted by protesters.
Lies Permana Lestari, Director of Retail at Sarinah said the shop lost revenue of at least 2.8 billion rupiah ($195,000).
Sarinah makes around 700 million rupiah to 1 billion rupiah daily during Ramadan.
The retailer re-opened on Saturday and started a midnight sale that will run through Friday to compensate for lost revenue. Prices have been slashed by around 30 percent to 70 percent.
“Ramadan is like a honeymoon for us, as around 30 percent of total revenue a year can be generated during one month alone,” said Lies.
“Unfortunately the riots hurt our business. Also, social media restrictions caused our partners (designers) trouble and difficulties to sell or promote on social media platforms.”
Clothing sales year-on-year grew by 5.7 percent in April 2019, outperforming the 4.1 percent growth in 2018 and 4.2 percent rise in 2017, according to the Retail Sales Survey conducted by the central bank.
(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim emmy.alim@refinitiv.com)
© SalaamGateway.com 2019 All Rights Reserved
