After TikTok Shop, they are also stopping the Chinese giant, which arrived in Southeast Asia in 2023. The business model it uses is contrary to Indonesian regulations because there are no intermediaries or distributors, which puts small and medium-sized businesses at risk. Minister Budi Arie Setiadi: the goal is for the digital space to “make society more productive and profitable.”
Jakarta (/Agencies) – Indonesia keeps its doors closed to the global e-commerce giant Temu – managed by the Chinese company PDD Holdings, which also owns Pinduoduo – which arrived in Southeast Asia last year, first to the Philippines and Malaysia . Minister of Communications and Information Technology Budi Arie Setiadi expressed fears that it could suffocate small and medium-sized businesses in the country. “We want the digital space to be filled with things that make society more productive and profitable. If it’s harmful, what’s the point? We will ban it,” he said in Jakarta last week.
As stated by the Director General of Foreign Trade of the Indonesian Ministry of Commerce, Isy Karim, what is questioned is, first of all, Temu’s business model, which consists of selling products directly from (mostly Chinese) factories to the consumers. This is contrary to Indonesian regulations, which require the presence of a middleman or distributor. The decision was made after a period of observation by authorities following Temu’s entry into Indonesia last July. As reported CNAthe issue has become a hot topic, especially after the participation of the online platform in the E-commerce Expo 2024 organized at the Indonesia Convention Exhibition (ICE), metropolitan Jakarta, on September 24 and 25 .
Temu – currently available in around 60 countries – had already attempted three times to register to operate in Indonesia since September 2022. At that time it had contacted the Ministry of Law and Human Rights to register its trademark, which was rejected. because there was already a company that used that name.
In October last year, controls on e-commerce in Indonesia also affected TikTok Shop, the online sales service offered by the famous Chinese social network, always justified by the need to protect local online operators, small merchants and user data. But the short-form video giant bought a 75% stake in Indonesian e-commerce operator Tokopedia, affiliated with the GoTo holding company, in January, marking its return to the market. Before establishing this strategic partnership, TikTok Shop Indonesia had received an ultimatum a week to become an independent application and separate from the main application. “Our priority is to continue to comply with local laws and regulations. Therefore, we will no longer facilitate e-commerce transactions on TikTok Shop Indonesia,” the company had stated.
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