Indonesia bans Temu in move to protect local SMEs

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Indonesia will ban eCommerce platform Temu in a move to protect local small and medium enterprises (SMEs). This is especially since its entrance into Indonesia could hurt the country's economy, minister of communications and informatics Budi Arie Setiadi reportedly said.

Speaking to the media, Budi reportedly said that the government will not give Temu a chance. He added that the digital space is to be filled with things that make society more productive and profitable, and that if it is detrimental, the government will ban it, reported inews Indonesia.

Temu has reportedly tried to register to operate in Indonesia three times. Of which, its registration was not approved because there are already companies in Indonesia of the same name and business categories.

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The platform has also since become a topic of discussion after it appeared at the 2024 eCommerce expo held on 24 and 25 September in Jakarta, according to CNA.

Temu is currently operated by PDD Holdings, which also owns Chinese online retailer Pinduoduo. The shopping platform is currently available in 60 countries across the world including the US, UK, Canada, Mexico, France, Germany, Australia and New Zealand.

In Southeast Asia, it reportedly entered Philippines and Malaysia last year and expanded into Thailand in July this year.

Temu is not the only entity to have faced issues entering Indonesia.

Last year, TikTok Shop was forced to suspend its online shopping service in Indonesia, one of its biggest markets, as government officials looked to protect local physical and online retailers.

TikTok Shop Indonesia was given a tight one-week deadline to become a standalone app and separate itself from the main app.

Following which, TikTok Shop formed a strategic partnership with Indonesian digital company GoTo, ensuring its re-entry into the market.

As part of the partnership, Tokopedia and TikTok Shop Indonesia's businesses were combined under the Tokopedia entity.

Under the combined Tokopedia entity, TikTok holds a controlling stake, according to GoTo in a statement.

In an interview with MARKETING-INTERACTIVE in May this year, Aditia Grasio Nelwan, head of communications at Tokopedia said the two entities will be undertaking "a series of joint initiatives to further support local MSMEs in Indonesia."

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