WhatsApp Business Application as a Digital Marketing Strategy of UMKM

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Advances in Economics, Business and Management Research, volume 205
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Proceedings of the International Conference on Social, Economics, Business, and
Education (ICSEBE 2021)
112
WhatsApp Business Application as a Digital Marketing
Strategy of UMKM
Asmayanti1,* Agus Syam2, Muhammad Alfa Sikar3, Beche Bt Mamma4, Sudarmi5,
Nurafni Oktaviyah6
1 Universitas Negeri Makassar, Indonesia
2 Universitas Negeri Makassar, Indonesia
3 Universitas Negeri Makassar, Indonesia
4 Universitas Bosowa, Indonesia
5 STIM Lasharan Jaya Makassar, Indonesia
6 Universitas Negeri Makassar, Indonesia
Email: asmayanti@unm.ac.id
ABSTRACT
Small and Medium Enterprises (UMKM) are the real sector that accounts for 99.9% of all businesses operating in
Indonesia and absorbs 97% of the total workforce. The growth of UMKM certainly requires a marketing strategy in
the face of business competition. The application Whatsapp Business is functional design platform to help business
people manage customer service. There are 5 (five) main features of Whatsapp Business that can help optimeze
UMKM development; (1) a catalog for a gallery of products offered, (2) a cart for costumers when they like a product
that can be included as a list of items of interest, (3) an automatic massage prepared to provide a quick response as a
greeting to new cutomers, (4) quick reply to save message formats for frequently asked questions and (5) labels to
mark messages for easy locating. In Indonesia, there are around 6 million users who have accessed Whatsapp
Business every month since 2018. This is an opportunity for UMKM to develop their business.
Keywords: Whatsapp Business, Digital Marketing, UMKM.
1. INTRODUCTION
National economic growth is primarily defined by
regional economic development, while small and
medium-sized economic activities commonly back the
regional economy. According to the Indonesian
Ministry of Cooperatives and MSMEs, micro, small and
medium enterprises (MSMEs) account for 99.9% of all
companies operating in Indonesia and 97% of the total
workforce. Business units that fall into micro, small and
medium enterprises (MSMEs) are crucial for regional
and national economic development [1]. The MSME
business sector is a sector that is determined when the
peak season of economic turmoil. Moreover, it is
anticipated to play an essential role in providing
employment opportunities to reduce unemployment and
play an important role in Indonesia's economic
development.
The advancement of technology has forced MSMEs
to do business hustles while skilling up their digital
capabilities, including aspects of digital marketing.
According to BPS, eight million MSMEs were
connected to the digital ecosystem in the 8 years before
the COVID-19 pandemic. The indication of the
principal value was identified during the pandemic.
Until May 2021, it peaked at 13.5 million. On the one
hand, the information about the needs of prospected
consumers can be gathered from digital marketing [2].
Moreover, potential consumers can also find and
receive information about products by simply browsing
the virtual world to facilitate the search process.
Shoppers are now more independent in making
purchasing decisions based on search results. Digital
marketing can reach everyone, wherever they are,
without geographic or time restrictions [3].
According to 2019 BPS data, as of January 2019, it
is indicated that in Indonesia, 93% of internet users
search for goods or services online, 90% of users use
various devices to access online stores, and 86% of
users use various devices (laptops and mobile phones).

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telephone) Conduct online transactions). 37% of users
make transactions via PC or laptops, and 76% of users
do online transactions via smartphone devices. The
explanation above shows that Indonesia's online
shopping expectation is fruitful, where there is a need to
harmonize it with the expectation of the prospective
customers in digital marketing. Potential customers have
used social media or social networks to do online
shopping. Social networks have differences. For
example, Facebook is used to gain more friends;
Instagram is for artistic self-value; Line is for
marketing; and Linkedin is for more professional
networking. In comparison, email is usually used to
send documents and big files. However, it can be seen
that business people prefer to use personal websites [4].
One of the US digital marketing agencies, We
Are Social, has released data as of January 2017,
Youtube (49%) has been crowned as the most popular
social media. The second is Facebook (48%). Rank
three was Instagram (39%), followed by Twitter (38%).
While Whatsapp (38%) was at the fifth, and the sixth
was Google (36%). Other social media platforms such
as FB Messenger, Line, Linkedin, BBM, Pinterest, and
WeChat had average values [5].
Whatsapp has been a well-known application for
communication and sending messages. Argues that
social media encouraged people to interact with each
other through the communities they created in those
applications [6]. In addition, Whatsapp provides a
digital Business platform for buyers and sellers to
interact and share trusted information about the products
and the companies, which sellers and buyers benefit
from. In Indonesia, around 6 million users have had
access to WhatsApp Business every month since 2018.
UMKM can use this massive digital platform growth to
expand its networking.
2. THEORETICAL BASIC
2.1. Whatsapp Business
Whatsapp Business is a free downloadable
application specially designed for micro business
owners. Whatsapp business also comes with features
including a business profile which allows users to add
important information such as an address, opening
hours, business description, email address, and website.
Through this application, business communication can
run smoothly and comfortably with [7].
Whatsapp business has drawbacks and benefits. The
benefits are: 1) WhatsApp Business is designed as a
business platform. 2) it has automatic panel response; 3)
it helps to reply faster; 4) every message has attached
level; 5) it provides a tool to analyze interaction sending
by buyers, 6) Company/office number can be used.
While the drawbacks of the WhatsApp Business
application are: 1) business account’s name is
permanent. Therefore, it is non-changeable 2) Data
security is weak. 3) You cannot use different mobile
numbers; 4) Fixed mobile number is used [7].
2.2. Digital Marketing
Digital marketing emphasizes the availability of the
internet connection, which can bridge interaction
between buyers and sellers [8].
Digital marketing supports sellers to expand the
marketing of their products by maximizing the use of
social media. Consequently, sellers can reduce the
expenditure fee and double the profits. Moreover, social
media can send all forms of communication such as
audio, images, and text to the sellers and buyers and the
broader customers [9].
Digital marketing transcends spaces. Compared to
conventional marketing, it is superior. This context is
supported [10] research finding. They found that online
marketing influences customer preferences towards
goods and services.
2.3. Small and Medium Entreprises (UMKM)
The Business World is operated in and registered in
Indonesia. It is included micro, small, medium, and
large businesses.
In the 1945 Constitution and TAP MPR NO.
XVI/MPRRI/1998, Stating about Economic Politics in
the Context of Economic Democracy; people's economy
needs to be empowered by the Small and Medium
Enterprises. These SMEs could help strengthen the role
and potential of the people's economic structure,
creating a prosperous, wealthy, and just national
economy. Furthermore, in Law Number 9 of 1999, the
UMKM definition is stated clearly. However, it was
changed to Law Number 20 Article 1 of 2008
concerning Micro, Small and Medium Enterprises
because of certain turbulence conditions. The definition
of UMKM is as follows:
2.3.1. Micro Enterprises
Micro Enterprises, as regulated in this Law, are
owned by individual enterprises and/or individual
businesses included in the micro-enterprises criteria.
Standards for micro-enterprises are i. Net worth is
about Rp. 50,000,000.00 (50 million rupiahs), buildings
for business premises is not counted; or ii. Annual sales
can be up to Rp.300,000,000.00 (300 million rupiahs).

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2.3.2. Small Enterprises
Small Business is operated by individual enterprises
or legal entities, which cannot be categorized as a
substitute or a company branch. That is directly or
indirectly owned or controlled by a company or
becomes part of a large company that includes the
indicators of a small business, which the meaning is
stated in the law.
Small business standards are: i. net worth is
exceeded of Rp. 50,000,000.00 (50 million rupiahs), its
profit can reach a maximum of Rp. 500,000,000.00 (500
million rupiahs), land and buildings for business
premises is not included; or ii. Annual sales exceeded
Rp.300,000,000.00 (300 million rupiah), can reach
Rp.2,500,000,000.00 (Rp2.5 billion).
2.3.3. Medium Enterprises
An individual or group of people owns medium
Enterprises. This kind of business is operated by a
person or people that are part of the core circle of the
business. Usually, it owns medium income and can
generate more profit. However, it is also bounded by the
law.
Medium-sized enterprises standards are: i. net worth
is exceeded Rp. 500,000,000.00 (500 million Indonesian
rupiah). It can reach 10,000,000.00 (ten billion rupiah),
land and buildings for business are not included, or ii.
annual sales exceed Rp.2,500,000,000.00 (Rp2.5
billion). It can be to Rp.50,000,000,000.00 (Rp5
billion).
2.3.4. Large Enterprises
States manages large Enterprises, national private
business, Joint venture, cooperated foreign business in
Indonesia. The income is higher than the medium
enterprises.
Large enterprises standards are: i. net worth is
exceeded minimum Rp. 500,000,000.00 (500 million
Indonesian rupiah). It can be to minimum
Rp.50,000,000,000.00 (Rp5 billion).
3. METHOD
This research is a qualitative study that uses a
literature review that focuses on explaining the study's
results.
4. DISCUSSION
The advancement of technology has influenced all
aspects of human life. The business world has been
dramatically affected by the so-called Digital-based
marketing, which assists sellers in attracting more
potential buyers. This marketing based-digital provides
options and alternatives for customers, expands business
networking, promotes products, attracts more
consumers, increases the value of products sold, and
significantly increases income. Digital Marketing
provides all information buyers need regarding products
and can persuade them to do online transactions via the
internet. Buyers also can monitor and search whatever
they want regardless of time and geographical
restrictions. Digital marketing is a two-way
communication that can lead to public awareness and
engagement with certain products and brands.
The WhatsApp messaging application users continue
to grow as people's daily lives are increasingly
dependent on digital connectivity.
As a digital marketing application, WhatsApp
business is designed explicitly for micro-businesses to
make it easier to communicate with customers.
4.1. Steps to Create Account
The following are the steps to create an online
business account using the WhatsApp Business
application, namely:
 Download the WhatsApp Business application
via the Google Play Store, then install in the
right corner that says install.
 If it is already installed, open the WhatsApp
Business application, agree, and continue at the
green bottom center.
 Enter the phone number you want to use for
WhatsApp Business and press Continue in the
green bottom center. Then you can use
WhatsApp Business
 Go to WhatsApp Business settings or settings.
 Go to Business Settings.
 Enter the catalog menu.
 Press the plus sign at the below right corner to
get a new product.
 When the Add Product opens, write the product
data.
 Press the Done button to save. You can also sell
online using WhatsApp Business.
4.2. WhatsApp Business Features
4.2.1. Catalog
This feature creates a menu gallery that can display
products and services for easy selection by customers
and online shoppers. This concept helps businesses

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deliver products and makes it easier for customers to
find the products they need.
WhatsApp recently updated this feature,
allowing businesses to create and manage catalogs on
their computers. Companies can also hide out-of-stock
items from their catalogs. You can access this feature
update from the web or desktop version of WhatsApp
Business.
4.2.2. Cart
When customers like an item, they can directly add
the item to their shopping cart and process the order by
chatting with the business owner. When the business
account owner activates the catalog function, the
shopping cart function is automatically available. The
customer can add the selected item to the shopping cart,
and then the seller can continue his order to the
transaction stage.
4.2.3. Auto Messages
When a seller cannot reply to a customer's message,
this feature can set up an auto-reply message to know
when to reply. Sellers can also create greetings to
introduce their business to new customers. Automated
messages ensure that sellers reply to customers anytime,
anywhere. This feature is essential for business people
who have jet lag customers abroad.
4.2.4. Quick Replies
Quick Reply allows merchants to save and reuse
message formats to answer common questions quickly.
How to activate it on Android, click "More Options,"
then select "Business features" and "Quick reply."
Quick response saves a lot of time and helps customers
respond quickly.
4.2.1. Label
This feature is designed to manage contacts and
chats so salespeople can find them faster. Using
shortcuts on Android, press and hold a message, select a
shortcut, add a shortcut, or create a new shortcut. To
find messages with shortcuts, on the chat screen, tap
More options, select Shortcuts, and then select the
shortcut you're looking for. Labels on WhatsApp
Business. This feature helps manage incoming chats and
can categorize questions from new or existing
customers.
4. CONCLUSION
The existence of the UMKM actors can harmonize
changes in marketing behavior from traditional to
digital. They use online platforms that can encourage
the growth of Indonesia's economic sectors. Digital
marketing is expected to posit MSMEs into the centers
of economic power. Social media is a means of digital
technology, especially digital marketing. Moreover, no
technical and advanced skills are needed to operate this
social media. Therefore, it can be used by all people and
reach potential buyers in real-time. The illiteracy of
MSME actors in digital marketing can cause problems,
and these problems need to be overcome as the
improved situation can help sellers promote their
products. Understanding the importance of digital
marketing for the development of their business can
motivate them to learn more about digital marketing to
promote their products online.
The WhatsApp Business application can help small,
medium, and micro businesses to market their products.
Especially in the digital era, the competition is getting
more challenging, the speed of information and services
is very much needed.
Whatsapp Business has 5 (five) main functions that
can maximize the development of MSMEs; (1) product
library catalog provided, (2) shopping cart for customers
when they like a product that can be included as an item
of interest, (3) Set up automated messages to provide
quick responses to welcome new customers, (4) Quick
replies to save the general inquiry message format, and
(5) Bookmark messages for easy discovery.
AUTHORS’ CONTRIBUTIONS
All authors fully contribute starting from the
preparation of topics, research data, and review of
research results
ACKNOWLEDGMENT
The author teams are gratefull to ICESEBE Comitee
and Makasar State University (UNM).
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