The Indonesian government has asked Google and Apple to block Chinese e-commerce company Temu from local app stores due to concerns about the economic impact of the consumer-to-factory model, Reuters reported on Friday.
Communications and Information Technology Minister Budi Ali Setiadi told the news agency that Jakarta is concerned that a flood of cheap products from China could damage the future of the country’s millions of small and medium-sized enterprises. Ta.
Temu, an e-commerce site run by conglomerate PDD Holdings, connects consumers directly with factories in China, giving them access to a dizzying array of cheap products. Budi told Reuters that the Indonesian government views this model, backed by a relentlessly optimized China-centric logistics network, as a form of “unhealthy competition”.
“We’re not here to protect e-commerce, we’re protecting small businesses. There are millions of people that we have to protect,” he said.
Temu is not yet available in Indonesia, but Budi said the app’s removal was necessary as a pre-emptive measure given its potentially destructive impact. He added that the government plans to request a similar block for Chinese shopping service Shein, which operates on a similar direct-to-consumer model. Apple and Google’s parent company Alphabet have not confirmed that they have received Indonesia’s request or whether they plan to comply with it, Reuters reported.
The ban reflects the rapid growth of e-commerce in Indonesia. The commerce sector is valued at $62 billion. By 2023, it is expected to grow to around $160 billion by the end of the decade.
As Muhammad Zulfikar Rakhmat recently pointed out on these pages, the Indonesian government has been targeting this website for some time. In August, the Indonesian Ministry of Trade rejected the company’s trademark registration application in Indonesia. This comes shortly after Ishi Karim, director of the Department of Domestic Trade at the Ministry of Trade, said the app’s business model “does not fit with our policies”. Every activity from the factory to the consumer requires an intermediary, or distributor. ”
The reported ban on the Tem app comes as Indonesia has increased its regulatory weight to ensure that cheap imports, especially from China, do not undermine the interests of millions of small businesses and business owners, an important political constituency. It’s just the latest sign of a willingness to avoid it.
Last year, the government banned e-commerce on social media platforms, a move widely seen as a response to the sudden popularity of TikTok Shop, an e-commerce platform run by the Chinese video-sharing app. Similar to the impending ban on the Temu app, the goal of the social media e-commerce ban was to “build a fair, healthy and beneficial e-commerce ecosystem,” according to one senior official. TikTok has since complied with the law and shut down its operations.
In July, the Indonesian government also announced that it would impose import duties of up to 200% on some products from China, including textiles, clothing, footwear, electronics, ceramics and cosmetics. Indonesian officials say cheap imports are causing textile factory closures and mass layoffs.
