Indonesia’s authorities has requested Google and Apple to dam the Chinese language e-commerce agency Temu from their native app shops, petrified of the financial impacts of its consumer-to-factory mannequin, Reuters reported on Friday.

Budi Arie Setiadi, the minister of communication and knowledge know-how, advised the information company that Jakarta feared that the way forward for the nation’s thousands and thousands of small and medium-sized enterprises might be undermined by a flood of low-cost merchandise from China.

An e-commerce website run by the conglomerate PDD Holdings, Temu connects customers instantly with factories in China, giving them entry to a dizzying array of low-cost merchandise. Budi advised Reuters that the Indonesian authorities regarded this mannequin, which is underpinned by ruthlessly optimized China-centered logistics networks, as a type of “unhealthy competitors.”

“We’re not right here to guard e-commerce, however we defend small and medium enterprises. There are thousands and thousands we should defend,” he stated.

Whereas Temu will not be but accessible in Indonesia, Budi stated that the removing of the app was vital as a pre-emptive measure, given its doubtlessly disruptive impression. He added that the federal government plans to request an analogous block for the Chinese language buying service Shein, which operates on an analogous direct-to-consumer mannequin. Based on the Reuters report, Apple and Google’s mother or father firm Alphabet haven’t confirmed receiving the Indonesian request, nor whether or not they plan to adjust to it.

The ban displays the speedy development of e-commerce Based on the e-Conomy SEA 2023 report, collectively compiled by the tech large Google, Singapore’s Temasek, and the enterprise capital agency Bain & Firm, Indonesia’s e-commerce sector was price $62 billion in 2023, and is projected to broaden to round $160 billion by the tip of the last decade.

As Muhammad Zulfikar Rakhmat famous in these pages not too long ago, the Indonesian authorities has had the web site in its crosshairs for a while. In August, Indonesia’s Ministry of Commerce rejected the corporate’s utility to register a trademark within the nation. The was shortly after Isy Karim, the Commerce Ministry’s director basic for home commerce, stated that the app’s enterprise mannequin was “not suitable with our insurance policies. Each exercise from manufacturing facility to shopper will need to have an middleman, a distributor.”

The reported Temu app ban is simply the most recent signal of Indonesia’s willingness to throw round its regulatory weight in make sure that low-cost imports, significantly from China, don’t undermine the pursuits of its thousands and thousands of small proprietors and enterprise house owners – an necessary political constituency.

Final 12 months, the federal government banned e-commerce transactions on social media platforms a transfer that was extensively seen as a response to the sudden recognition of TikTok Store, an e-commerce platform run by the Chinese language video-sharing app. Like the upcoming ban of the Temu app, the purpose of the social media e-commerce ban, as per a senior official, was to “create a good, wholesome and helpful digital commerce ecosystem.” TikTok subsequently complied with the regulation and closed its operations.

In July, the Indonesian authorities additionally introduced that it might impose import tariffs of as much as 200 p.c on some merchandise from China, together with textiles, clothes, footwear, electronics, ceramics, and cosmetics. Indonesian officers say that low-cost imports have prompted the closure of textile factories and mass layoffs.