Reasons for SME Failure in Competition
📌 Approximately two-thirds (2/3) of new businesses ultimately fail in the long term due to competitiveness and internal factors.
📉 The analysis focuses on competitiveness, highlighting three main reasons why Small and Medium Enterprises (SMEs) struggle to survive.

Lack of Digitalization
📱 Only 8% of Indonesian SMEs have adopted digital tools, contrasting sharply with 65% in Singapore and 35% in Vietnam.
🤔 84% of Indonesian SMEs still maintain a traditional mindset, relying on physical stores and word-of-mouth marketing instead of digital outreach.
🛠️ Digitalization steps include: Step 1 (Marketing: Social Media, Online Stores, Digital Ads), Step 2 (Operations: Inventory Management, Accounting, aiming for over 50% efficiency gain), and Step 3 (Product: Adding value using digital insights).
📊 Businesses utilizing digital analytics for customer behavior and performance review show significantly higher profits compared to those operating purely on intuition, according to McKinsey research.

Competition from Larger Firms & Planning Deficiencies
♟️ SMEs often fail by attempting to compete head-to-head with large firms in the same market niche, instead of leveraging their natural advantages like speed and adaptability.
📝 Only 17% of Indonesian SMEs can create a formal business plan, indicating a lack of structured growth strategy compared to those who rely on gut feeling.
🐢 Large companies suffer from organizational structure and bureaucracy, often taking up to two years for product innovation, while agile SMEs can iterate in as little as two days.

Difficulty in Catching Market Trends
📈 Only 10% of SMEs use digital tools like Google Trends or Google Analytics to understand customer behavior and trends.
💰 Just 6% of SMEs effectively adapt pricing or economic strategies based on identified market trends.
🧐 74% of all businesses launch new products without conducting proper market research or trend analysis beforehand, relying solely on intuition.
🧪 Adaptation is a core skill; rather than chasing every hype (like Es Kepal Milo), businesses should integrate relevant trends into marketing campaigns and test them incrementally, potentially turning successful ones into core products.

Key Points & Insights
➡️ The three critical areas for SME survival are digitalization, creating structured business plans, and continuous trend adaptation.
➡️ SMEs should start digitalization simply by focusing on the marketing aspect (social media, simple online stores) as a low-hanging fruit for immediate impact.
➡️ Leverage the agility advantage over large corporations by combining quick operational adaptation with superior planning capabilities.

📸 Video summarized with SummaryTube.com on Dec 16, 2025, 12:22 UTC