Whether you’ve used the platform or not, Temu is widely known for its product’s affordability. Temu is an e-commerce platform founded in Boston, Massachusetts but is owned by PDD Holdings, a Chinese online retailer. Temu is a convenient site that provides shoppers with diverse products ranging from clothes, beauty and health, appliances, and more. However, Temu’s business has the power to either make or break a country’s economy.
On October 1st, Budi Arie Setiadi, Indonesia’s minister of Communication and Information Technology, said that allowing Temu in Indonesia would harm the economy by overpowering micro, small and medium enterprises (MSMEs). Temu sells products directly from factories to consumers, which creates conflicts with Indonesia’s trade regulations. Indonesia’s trade regulations require the involvement of an intermediary or distributor. Temu’s low prices and direct sales to consumers allow it to bypass tariffs, saving them a lot of money while profiting simultaneously. Indonesia’s government is concerned about the disadvantageous effect it will have on Indonesia’s market. Minister Budi wishes for Indonesia’s market to have a positive impact and “make society more productive and profitable”.
On October 11th, Indonesia requested that Apple and Google block Temu from both Apple’s App Store and Google Play. This aims to prevent Temu from establishing itself in the market before it can impact local enterprises.
Temu is set to face a similar fate in Indonesia as the ban on TikTok’s TikTok Shop, following the government’s request for Apple and Google to block Temu’s app. This move is part of Indonesia’s broader strategy to protect local businesses from foreign e-commerce platforms that can undercut domestic prices. The Indonesian government’s move to block Temu mirrors its broader strategy to protect local businesses from the disruptive impact of global e-commerce. While this may shield MSMEs from intense competition, it also raises questions about consumer access to affordable products and the role of international platforms in domestic markets. The tension between fostering local economic resilience and embracing global market opportunities will continue to shape Indonesia’s trade policies, influencing the future landscape of e-commerce in the region. Finding a balance that supports both local businesses and consumer interests remains a challenging yet crucial endeavor.
Sources:
https://www.techinasia.com/news/indonesia-blocks-temu-protect-local-msmes
https://www.wsj.com/business/u-s-trade-loophole-fuels-rise-of-chinas-new-e-commerce-firms-05cf2e05
https://www.reuters.com/business/retail-consumer/indonesia-asks-apple-google-block-chinas-temu-protect-small-merchants-2024-10-11/