12-10-2024 (JAKARTA) In a move to protect its small and medium-sized enterprises (SMEs), Indonesia has requested that tech giants Google and Apple remove the Chinese fast-fashion e-commerce platform Temu from their application stores in the country. This pre-emptive strike against the PDD Holdings-owned app was announced on Friday by Communications Minister Budi Arie Setiadi in an exclusive interview with Reuters.
Minister Setiadi emphasised that the decision was taken to safeguard local businesses from the potential flood of ultra-cheap products offered by Temu. The platform’s business model, which directly connects consumers with Chinese factories to drastically reduce prices, has been labelled as “unhealthy competition” by the Indonesian government.
“We’re not here to protect e-commerce, but we protect small and medium enterprises. There are millions we must protect,” Setiadi stated, underscoring the government’s commitment to supporting local businesses. He added that while no transactions by Indonesian residents have been detected on Temu thus far, the move is a preventative measure.
The minister also revealed plans to extend this blockade to Shein, another Chinese shopping service known for its low-cost offerings. Furthermore, Jakarta has made it clear that any attempts by Temu to invest in local e-commerce ventures would be met with resistance.
This decisive action follows Indonesia’s previous crackdown on TikTok’s e-commerce operations in the country last year, which resulted in the social media giant agreeing to acquire a majority stake in GoTo’s e-commerce unit to maintain its presence in Southeast Asia’s largest e-commerce market.
The rapid growth of platforms like Temu has sparked global concern, with several countries scrutinising their low-cost business models and the potential impact on local economies. Indonesia’s e-commerce industry, projected to expand from $62 billion in 2023 to approximately $60 billion by 2030, according to a report by Google, Temasek Holdings, and Bain & Co., is clearly a market the government is keen to protect.
