Indonesia is expected to continue its policy of preventing Chinese e-commerce platform Temu from entering the country to protect its small and medium-sized enterprises.
According to the Hong Kong daily South China Morning Post (SCMP) and Singapore’s CNA broadcast on the 9th (local time), the Indonesian government has adhered to this policy since 2022, when Temu applied to enter the local market.
Indonesia’s Communications Information Minister Budie Setiadi said in a recent broadcast, “Temu cannot come into Korea because it can damage the economy, especially small and medium-sized Indonesian companies,” adding, “We will not give that room.”
Minister Budi said the country’s online space should be filled with things that “make society a more productive and profitable place,” and expressed concern that “our small and medium-sized businesses will be destroyed if left to their own devices.”
Temu has attempted to register three times to enter the Indonesian market since September 2022, according to an aide to the Minister of Small Business and Cooperatives, Piki Satari.
Temu recently applied for registration, but was rejected because an Indonesian company was using the same brand name, Peaky explained.
Recently, the Indonesian Ministry of Trade also said that Temu’s business model, which directly sells products produced at Chinese factories to consumers, is contrary to Indonesia’s trade regulations that require intermediaries and distributors.
Indonesian officials pointed out that Temu’s business method of eliminating stakeholders such as local vendors and delivery companies allows foreign companies to squeeze their own small and medium-sized companies and maintain low prices.
Earlier in June, Teten Masduki, Minister of Small and Medium Businesses and Cooperatives, mentioned that Temu poses a greater threat than TikTok shops, a shopping service on China’s ByteDance’s video platform TikTok.
TikTok shops entered the Indonesian market in 2021 and grew rapidly, but the Indonesian government effectively halted TikTok shops last year by banning them from selling goods on social media, saying it protects the country’s e-commerce industry.
In response, TikTok invested $1.5 billion (about 2 trillion won) in Tokopedia, Indonesia’s largest e-commerce company, and became a controlling shareholder and resumed its local online shopping business.
Temu has recently expanded into the Southeast Asian market, entering the Philippines and Malaysia in August and September last year, respectively, and starting operations in Thailand in July.
SALLY LEE
US ASIA JOURNAL
