Indonesia’s authorities has requested Google and Apple to dam the Chinese language e-commerce agency Temu from their native app shops, frightened of the financial impacts of its consumer-to-factory mannequin, Reuters reported on Friday.
Budi Arie Setiadi, the minister of communication and knowledge know-how, informed the information company that Jakarta feared that the way forward for the nation’s tens of millions of small and medium-sized enterprises may very well be undermined by a flood of low-cost merchandise from China.
An e-commerce web site run by the conglomerate PDD Holdings, Temu connects customers straight with factories in China, giving them entry to a dizzying array of low-cost merchandise. Budi informed Reuters that the Indonesian authorities regarded this mannequin, which is underpinned by ruthlessly optimized China-centered logistics networks, as a type of “unhealthy competitors.”
“We’re not right here to guard e-commerce, however we defend small and medium enterprises. There are tens of millions we should defend,” he mentioned.
Whereas Temu isn’t but out there in Indonesia, Budi mentioned that the removing of the app was mandatory as a pre-emptive measure, given its probably disruptive influence. He added that the federal government plans to request an analogous block for the Chinese language purchasing service Shein, which operates on an analogous direct-to-consumer mannequin. In response to the Reuters report, Apple and Google’s mum or dad firm Alphabet haven’t confirmed receiving the Indonesian request, nor whether or not they plan to adjust to it.
The ban displays the fast progress of e-commerce In response to the e-Conomy SEA 2023 report, collectively compiled by the tech big Google, Singapore’s Temasek, and the enterprise capital agency Bain & Firm, Indonesia’s e-commerce sector was value $62 billion in 2023, and is projected to increase to round $160 billion by the tip of the last decade.
As Muhammad Zulfikar Rakhmat famous in these pages not too long ago, the Indonesian authorities has had the web site in its crosshairs for a while. In August, Indonesia’s Ministry of Commerce rejected the corporate’s software to register a trademark within the nation. The was shortly after Isy Karim, the Commerce Ministry’s director normal for home commerce, mentioned that the app’s enterprise mannequin was “not appropriate with our insurance policies. Each exercise from manufacturing facility to shopper will need to have an middleman, a distributor.”
The reported Temu app ban is simply the most recent signal of Indonesia’s willingness to throw round its regulatory weight in be certain that low-cost imports, significantly from China, don’t undermine the pursuits of its tens of millions of small proprietors and enterprise house owners – an vital political constituency.
Final 12 months, the federal government banned e-commerce transactions on social media platforms a transfer that was extensively seen as a response to the sudden recognition of TikTok Store, an e-commerce platform run by the Chinese language video-sharing app. Like the upcoming ban of the Temu app, the purpose of the social media e-commerce ban, as per a senior official, was to “create a good, wholesome and useful digital commerce ecosystem.” TikTok subsequently complied with the legislation and closed its operations.
In July, the Indonesian authorities additionally introduced that it could impose import tariffs of as much as 200 % on some merchandise from China, together with textiles, clothes, footwear, electronics, ceramics, and cosmetics. Indonesian officers say that low-cost imports have triggered the closure of textile factories and mass layoffs.
