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E-commerce players confused as new rule sparks ‘wild interpretation’
President Joko “Jokowi” Widodo signed Government Regulation No. 80/2019 on e-commerce on Nov. 25, requiring domestic and foreign e-commerce players from platform providers to merchants, to secure a business license.
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Illustration of e-commerce. (JP/Donny Fernando)
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he government’s new regulation on e-commerce has left small business players confused, with every party that sells online now required to get a license. For e-commerce players, the regulation has led to “wild interpretation” according to the industry’s representative.
Disfiyant Glienmourinsie, a merchant who sells homemade food primarily through Instagram, said the government should clearly define the kind of online merchants that should apply for a permit. Otherwise, the regulation could potentially discourage digital entrepreneurship.
“For new online merchants that are only a week or a month into their business, I think [the permit] is not worth it. They are likely to think ‘I want to focus on my business but instead am hampered [by the government]’,” said the 31-year-old, who started her online business in mid-2018.
For small businesses that sell their goods and services online, it would be better for the government to allow them to grow in scale before enforcing any regulation on them, Disfiyant added.
Giustia Geoda, who occasionally uses Instagram to sell knitted bandanas, said it was likely the regulation would be difficult to enforce.
“How does [the government] know that I sell [goods online]?” Giustia inquired, adding that the permit requirement would not affect the way she did her business unless the e-commerce platform required her to upload her business permit, which would then prompt her to comply with the regulation.
E-commerce transactions in Indonesia are expected to quadruple in the next six years with gross merchandise value (GMV) projected at US$82 billion in 2025 from $21 billion this year, according to the e-Conomy SEA 2019 report by Google, Temasek and Bain & Company.
