Indonesia bans e-commerce firm Temu over fears its small enterprises could be ‘destroyed’
Temu’s business model of selling directly from factories to consumers goes against Indonesia’s trade regulation, an official said previously.
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SINGAPORE: Indonesia will uphold its ban on e-commerce platform Temu due to fears it could disrupt the country’s micro, small and medium enterprises, said its Minister of Communications and Informatics Budi Arie Setiadi.
The global online marketplace is operated by PDD Holdings, which also owns the popular Chinese online retailer Pinduoduo.
Indonesian authorities have been on alert for Temu’s entry into Southeast Asia’s largest economy in recent months.
Its business model of selling products directly from factories to consumers goes against Indonesia’s trade regulation requiring an intermediary or distributor, the Trade Ministry’s domestic trade director-general Isy Karim said previously.
Minister Budi said in Jakarta on Tuesday (Oct 1) that allowing Temu in Indonesia could hurt the economy and society.
"No, Temu cannot enter because it damages the economy, especially Indonesian micro, small and medium enterprises. We will not give it a chance," he said, as reported by iNews.
"We want the digital space to be filled with things that make society more productive and profitable. If it is detrimental, what's the point? We will ban it. Our micro, small and medium enterprises will be destroyed if left unchecked," he continued.
The Ministry of Cooperatives and SMEs previously said Temu had thrice tried to register to operate in Indonesia.
Since September 2022, it has tried to register with the Ministry of Law and Human Rights for trademark rights, said Mr Fiki Satari, Special Staff for Creative Economy Empowerment at the Ministry of Cooperatives and SMEs, in August.
Its registration was not approved because there was already a business using the name.
Temu’s application became a topic of discussion after the company appeared at the 2024 E-commerce Expo held on Sep 24 and 25 in Greater Jakarta.
Temu, which is available in about 60 countries, entered Southeast Asia last year, beginning with the Philippines last August and Malaysia last September. It expanded into Thailand in July this year.
In October last year, Indonesia also banned TikTok Shop, citing the need to protect smaller merchants and user data. But the short-form video giant bought a 75 per cent stake in Indonesian e-commerce player Tokopedia in January, marking its re-entry into the market.
Read this article in Bahasa Indonesia here.
