16-10-2023 (JAKARTA) Traditional retailers in Indonesia are urging the government to consider closing down other e-commerce platforms, following the shutdown of TikTok’s e-commerce feature. They argue that such a move could help revive offline shopping locations such as malls and markets that have seen a decline in foot traffic.
According to sellers in Tanah Abang Market, the closure of TikTok Shop had little impact on their businesses, and they believe that the offline retail sector will only recover if all e-commerce platforms are closed simultaneously. These sellers have experienced a significant drop in transactions since the rise of online retail.
However, not everyone agrees with this approach. Some argue that continuing to embrace digitalization is essential, especially for young entrepreneurs who are launching their businesses through e-commerce platforms.
The government has also been called upon to address the issue of inexpensive imported goods, which are affecting the offline market. While Trade Ministry Regulation No. 31 of 2023 has set a minimum freight-on-board (FOB) price for imported goods sold on domestic e-commerce platforms, retailers believe that further measures are needed to combat predatory pricing and ensure fair competition.
Stella Kusumawardhani, a regional industry analyst at Bank Mandiri, emphasized the importance of creating a comfortable and attractive shopping environment in offline venues. She noted that online sales have decreased since the pandemic, as people have begun returning to shopping centers not just for purchases but also for socializing.
To support the transition, the government is encouraged to work with micro, small, and medium enterprises (MSMEs) to increase digitalization and provide opportunities for digital technology skills development. Trade Minister Zulkifli Hasan also stressed the need for commercial markets, including apparel and shoes, to establish an online presence alongside their offline operations.
