Getting small businesses (UMKM) to go digital is still a big piece of unfinished work for Indonesia in 2026. Of the 65.5 million small business owners who contribute around 61-62% of national Gross Domestic Product (GDP), only about 30 million genuinely use digital technology to run their business. Yet more and more customers search for and compare products online before they buy. Going digital has become a condition for surviving and moving up in an increasingly competitive market.
The good news is that the government, through the Ministry of Cooperatives and SMEs, is targeting 35 million digital small businesses, about 53% of the total, by the end of 2026. The target is realistic as long as business owners know the roadmap and do not feel they have to do everything at once. This article explains why digitalisation matters so much for keeping a business going, the challenges owners often face in practice, and seven practical steps you can start this week without a big upfront budget.
Why is going digital still a big task for small businesses in 2026?
The digital gap among Indonesian small businesses is striking. Of 65.5 million businesses that employ more than 117 million people, most still rely on face-to-face sales or a WhatsApp group with no proper system behind it. That makes it hard for many owners to compete with rivals who already present themselves well online. There are several main reasons why small businesses are slow to go digital, from know-how to planning.
Limited digital literacy and infrastructure
Many business owners feel they are not good with technology, or worry that going digital will cost too much. In fact, building a professional website or optimising a Google Business Profile is far more affordable than it was five years ago. A lack of technical understanding is often what keeps digital plans stuck at the intention stage, never actually carried out.
No clear priorities or roadmap
Some owners already have social media accounts but do not know what to do next. Without a clear roadmap, the move online stays half-done: posting content actively but with no website, or opening an online shop that never appears when buyers search Google for similar products.
Why going digital pays off for small businesses now
Recent data shows that Indonesia's digital economy has strong momentum. The e-Conomy SEA 2025 report from Google, Temasek and Bain & Company found that Indonesia's digital economy grew 14% to around US$99 billion, or about Rp 1,654 trillion, in 2025, driven by a surge in video commerce and AI adoption. A market this size is wide open to small businesses that move online early.
Consumer behaviour has shifted a long way too. Jakpat's Consumer & Commerce Outlook 2026 survey found that around 80% of consumers usually look up product information on Google, TikTok or Instagram reviews before deciding to buy. On the transaction side, 48% of consumers shop through a brand's official social media, while 19% buy directly from the official website. If your business does not yet have a convincing digital presence, potential customers may go to a competitor who already looks professional online.
7 practical steps for small businesses going digital in 2026
So that this does not stay at the talking stage, here are seven steps to take your small business digital. You can work through them gradually, in line with your capacity and budget, without changing everything in a day.
1. Build a professional website as your digital home
A website is a digital asset that belongs entirely to your business, unlike social media accounts, which depend on platform algorithms that can change at any time. The most fundamental step for a small business going digital is a professional website with clear costs, so customers can check your products, prices and contact details whenever they like without waiting for a chat reply.
2. Optimise your Google Business Profile for local search
For small businesses with a physical location, a complete Google Business Profile helps you appear when people search “near me” on their phones. It makes sure your digital efforts reach customers around your area of operation as well as people elsewhere online.
3. Tidy up your shopfront on social media and marketplaces
Keep product photos, descriptions and prices consistent across every channel you use. A tidy shopfront makes your business look more professional online and builds buyers' trust from their first visit, even before they message your admin.
4. Apply the basics of SEO so people can find you
A website does little good if it does not appear on the first page of Google when people search for the products or services you offer. Optimising your website content and structure around relevant keywords is an essential part of the long-term plan for a small business that wants to go digital and stay competitive.
5. Use digital ads to get results sooner
If you need results faster while SEO takes effect, Google Ads campaigns or social media ads can speed things up by reaching people who already have strong buying intent, so you are not simply waiting for organic traffic to grow on its own.
6. Build trust with reviews and educational content
Customer testimonials and educational content, such as tips articles, make your brand look more credible to new buyers. That trust is what turns going digital into actual sales instead of an online presence that produces nothing.
7. Train your team and review the data regularly
Going digital is an ongoing process rather than a one-off project. Train your team to read website visitor data and ad performance so that business decisions are based on data instead of guesswork or old habits.
Common challenges in going digital and how to deal with them
Besides limited digital literacy, another frequent challenge is a lack of time and people, especially for businesses run by one or two people. The answer is that owners do not have to do everything themselves. Working with a digital partner, such as a social media management service, or using affordable website packages can speed up the move online without hiring an in-house IT team, which costs far more.
Another challenge is fear of failing or losing money at the start, which leads many owners to keep putting it off even when they know the benefits. Digitalisation can start small: begin with a simple website and a Google Business Profile, then expand into paid advertising once your digital foundation is solid and measurable. The process does not have to be perfect from day one. What matters is that it runs consistently and keeps being reviewed over time.
Time to go digital, starting with small steps
The target of 35 million digital small businesses by the end of 2026 is achievable if every owner starts moving now instead of waiting for the “right” moment. From a professional website and local search optimisation to consistent content and ads, these small steps help extend your reach well beyond the streets around your shop. Do not wait for competitors to look convincing online first. Start going digital today with the simplest step, however small.
References
- Ministry of Cooperatives and SMEs and DJPb, Ministry of Finance (2025): data on the contribution of small businesses to national GDP and the 2026 digital small business target.
- Google, Temasek, Bain & Company (2025): e-Conomy SEA 2025 report.
- Jakpat (2026): Consumer & Commerce Outlook 2026.
- Ministry of Communication and Digital Affairs (Komdigi) (2026): target contribution of Indonesia's digital economy.
