INTRODUCTION
Technological sophistication seems to develop more rapidly along with the developing era. This is what brings us to The Fourth Industrial Revolution (Industry 4.0) based on the use of cyber physical systems or often referred to as computing systems. Industry 4.0 concept is considerably known as the development of digital-based or internet-based businesses. In recent years, the internet has become an indispensable information technology tool (Racolta-Paina & Luca, 2010). Advances in internet technology have facilitated the growth of home shopping through the internet (Lumpkin & Hawes, 1985). The internet has produced new forms of creation in businesses based on the internet or e-commerce. Kotler and Keller (2013) define e-commerce as a company or shopping site that offers a process for selling products and services online. Nowadays e-commerce is more than just buying and selling products online. E-commerce covers the entire process from the development, marketing, sales, delivery, service and payment of customers with the support of a network of business partners throughout the world.
The development of e-commerce has encouraged the evolution of e-commerce forms and models. In the past, consumers could only make transactions through related retailer websites, such as Amazon or e-bay, while the current trend is that consumers are greatly facilitated to transact through wide-spread marketplaces, also through social media and instant messaging (e.g., WhatsApp). The development of this transaction model is termed by Kucukcay and Benyoucef (2014) into mobile social commerce or a series of e-commerce activities carried out in cellular telephones. This technological change has been packaged in such a way that makes it easy for consumers to carry on transactions directly both with producers and intermediaries.
The potential for business growth in Indonesia is estimated to be quite large in line with the increasing use of the internet. Based on data from Bolton Consulting Group in 2013, the middle class in Indonesia who shop through e-commerce has reached 74 million people and is predicted to continue to increase in 2020 to 141 million people or around 54% of the total population in Indonesia. Considering this data, it is clear and certain that the potential of the e-commerce market in Indonesia is considerable. Kostini and Raharja (2019) find that as long as entrepreneur using perfect formula of financial strategies in their business, it will boost their business income and encourage the economic growth.
This phenomenon is certainly an attraction for lower middle class entrepreneurs, especially for new comers. Like the people living in Malang Bulan Terang Utama (BTU) subsidized housing, they are working in groups to try to build businesses by marketing e-commerce systems. Simply, they use instant messaging in the form of WhatsApp to market the sales of BTU residents. In WhatsApp they make a group of sellers and buyers. The specialty of the group is free shipping for the people of the BTU region. However, for buyers outside BTU there will be a shipping fee. From this group, it seems to provide significant results and of course also facilitate the surrounding community.
Up to now the group was called âBTU Online Market.â The BTU Online Marketplace was founded on a shared sense of fate. The average community in BTU housing is a lower middle class with below average work and income. In addition, some people are also young couples who are trying to run a new business. These new entrepreneurs are trying to take advantage of their productivity. On the other hand, the location of BTU subsidized housing is far from the main road so it is quite difficult to find food, goods or other services. So, an idea emerged to create a BTU Online Marketplace.
In this research, we will explore more deeply the impact of the BTU online market toward the level of social welfare. With the background of the lower middle class, of course, the existence of an online market by prioritizing this technology must be proven in its ability to change and increase the income of BTU subsidized housing communities in Malang. If this online market has a positive impact on peopleâs income, then the expansion of other forms of e-commerce will be carried out to improve the social welfare in the long term and be sustainable. Therefore, the purpose of this study is to identify the impact of the BTU online market toward the level of social welfare.
LITERATURE REVIEW
Social Commerce
Social media platforms are places where people look for product recommendations and to connect with many consumers who are brand-focused, so it makes sense that social media can take off. Technavio estimates that annual trade income through social media will exceed $165 billion by 2021. The rapid growth of e-commerce combined with the popularity of online social networking has had a huge impact on the global economy. This impact in particular is a change in consumer spending behavior and a new type of e-commerce called social commerce that is currently emerging (Shanmugam, Sunb, Amidi, Khani, & Khani, 2016). Social commerce adds e-commerce functions to social networks. Thus, it helps people to buy goods and services from places where they are already connected (Shanmugam et al., 2016; Zhou, Zhang, & Zimmermann, 2013).
Zwass (2010) states that e-commerce has been described as an ease in sharing business information, maintaining business relationships, and conducting business transactions through telecommunications networks. So, from this point of view it seems that e-commerce contains a wider range of business activities, such as marketing rather than just buying and selling online.
This is different from social commerce which refers more to e-commerce activities and transactions through the social media environment, so that most of it is done on social networks and uses Web 2.0 software. Social commerce is a part of e-commerce that involves the use of social media to assist in e-commerce transactions and activities (Turban, Bolloju, & Liang, 2011). With social commerce, it will be possible to run a business that can reach customers globally and build good relationships with them (Park & Kim, 2003; Turban et al., 2011).
Social Welfare in Digital Economy
In the economy, social welfare is often measured as income owned by households compared to demographic composition and family size. On the other hand, there are other standard calculations where welfare is calculated through the treatment of consumer demand (Ravallion & Lokshin, 2006). There are many indicators that can be used to measure household welfare, among others by considering the cost of living, income, education, level of happiness, job satisfaction and others. In this study, indicators used to measure the level of welfare include business income and turnover obtained by online merchants.
Katz (2017) states that economic digitalization has an impact on socioeconomic conditions. The development of computing, broadband and cellular telephone networks has an impact on the growth of the industrial sector, even this development raises new competitors namely the growth of the traditional economic sector. So, the development of traditional economy that is played in the household economy is faster than the indu...