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Plan to curb foreign e-commerce goods unlikely to protect SMEs: Experts
Experts cast doubt on the efficacy of planned new e-commerce regulations that are meant to limit foreign products on online trading platforms in hopes of protecting small local businesses.
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A Lazada warehouse in Indonesia in September 2021. Singapore-based Lazada is one of Southeast Asia's largest e-commerce operators. (Courtesy of Lazada/-)
T
he government is nearing completion of a set of new e-commerce regulations meant to limit the number of foreign products on online trading platforms to protect the local market, particularly small and medium enterprises (SMEs).
The regulations will bar online retailers from selling cheap imported goods on e-commerce platforms by imposing a minimum freight-on-board (FOB) price of US$100 per unit.
The government argued that these goods often enter Indonesia without going through regular custom procedures and certifications from local authorities.
Typically, these imported items are ordered through e-commerce platforms and are directly delivered from overseas to local customers, which the government defined as cross border trading, as reported by Tempo.
Cooperatives and Small and Medium Enterprises Minister Teten Masduki and Trade Minister Zulkifli Hasan were among those seeking to expedite the implementation, which would be realized through a revision of the prevailing Trade Ministerial regulation No. 50/2020.
While it seems to favor local businesses, the planned regulation received mixed responses from experts and relevant industries, especially about whether it could effectively carry out its purpose.
SME industry insider, Dewi Meisari, pointed out that there might be issues with the practical effectiveness of the regulations. She highlighted how authorities face a “dilemma” in balancing the needs of consumer protection and producer support, adding complexity to the issue.
