Experts expect significant changes in the Indonesian e-commerce sector, believing they could have far-reaching effects.
A new government policy will restrict sales of imported goods under US$100 to protect small and medium enterprises. Experts warn that this could shift market dynamics in favor of local businesses.
Inside Retailer reports that the Indonesian e-commerce market is projected to hit US$45 billion this year. Therefore, the policy’s implications are vast.
Policy changes and what it means
Details about how the policy will be enforced are still sketchy. Trade minister Zulkifli Hasan says it’s there to shield domestic producers from cheap imports, especially China.
Inside Retailer reports that this could be a substantial financial push for local e-commerce players. Local entrepreneurs have the potential to capture a market dominated by Chinese platforms.
But what about the long-term impact on trade? Dr. Seshan Ramaswami from Singapore Management University has says such a move can potentially spark trade tensions.
Influx of cheap goods
A government task force is probing the circumstances around illegal imports. The Jakarta Post reports that “many foreign nationals” act as distributors. They have access to local warehouses to store goods in the country.
The government used an auditing process to investigate the origin of the goods sold at malls. Last month, the task force seized billions worth of illegally imported goods stored in a warehouse.
The government says local manufacturers are battling to compete. Indonesia’s textile industry has been hit the hardest by ‘cheap imports.’
Amazon plans to import Chinese goods
Two months ago, Amazon had the industry abuzz when leaked information suggested that it was planning to launch a bargain section. The sector viewed this as a direct retaliation against Shein and Temu, who were gaining popularity among online shoppers.
Chinese warehouses would ship the items directly to overseas customers.
This is one of Amazon’s most aggressive responses to China’s bargain sites.
NOW READ: Is Amazon targeting Temu’s customers with discounted Chinese imports?
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
