Indonesia blocks Temu, fearing for local trade and user data
After TikTok Shop, Jakarta banned the Chinese giant that arrived in Southeast Asia in 2023. Its business model violates Indonesian regulations, due to the absence of intermediaries and distributors. Small and medium-sized enterprises are at risk. For Minister Budi Arie Setiadi, digital space should make “society more productive and profitable.”
Jakarta (AsiaNews/Agencies) – Indonesia is keeping its doors closed to Temu, operated by Chinese e-commerce company PDD Holdings, which also owns Pinduoduo.
The giant online marketplace arrived in the Southeast Asia last year, first in the Philippines followed by Malaysia.
Indonesia’s Minister of Communications and Information Technology, Budi Arie Setiadi, expressed fear that it could undermine the country's small and medium-sized enterprises.
"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,” he said last week in Jakarta.
For Isy Karim, director general of Foreign Trade at the Indonesian Ministry of Trade, the main issue is Temu's business model, which consists of selling products directly from (mostly Chinese) factories to consumers in violation of Indonesian regulations requiring an intermediary or distributor.
This follows a period during which the authorities monitored Temu's entry into Indonesia. But the issue became a hot topic, especially after it took part in the E-commerce Expo 2024 at the Indonesia Convention Exhibition (ICE), Greater Jakarta, from 24 to 25 September, CNA reported.
Temu, which is currently available in some 60 countries, tried to register three times to operate in Indonesia, since September 2022 before it took part in the Expo.
In October last year, Indonesia clamped down on e-commerce to protect smaller Indonesia merchants and user data. One of the companies affected was TikTok Shop, which belongs to the famous Chinese short-form video hosting service TikTok.
In January, however, the latter bought a 75 per cent stake in Indonesian e-commerce player Tokopedia, which is affiliated with the GoTo holding company, marking its re-entry in the Indonesian market.
Before establishing such a strategic partnership, TikTok Shop Indonesia had been given a week to become a standalone app, separate from the main app.
“Our priority is to remain compliant with local laws and regulations. As such, we will no longer facilitate e-commerce transactions in TikTok Shop Indonesia,” the company said.
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