Indonesia’s e-commerce import ban: risky protectionist move or political ploy that’s ‘not going to work’?

The proposed ban on imported goods valued at less than US$100 each would be difficult to implement and run afoul of WTO rules, observers say

But it may have more to do with drumming up nationalist sentiment, and playing on deep-rooted fears of exploitation, ahead of next year’s polls

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Online sellers offer goods to viewers of a TikTok livestream in Jakarta earlier this year. Goods worth less than US$100 each bought via online marketplaces or social media would be covered by the proposed import ban. Photo: AFP

Published: 9:30am, 2 Sep 2023Updated: 5:36pm, 3 Sep 2023

Torajamelo avoids exporting its hand-woven women’s wear, home decor and gifts to China, lest the self-styled “slow-ethical” fashion brand’s designs are copied.

As a small Indonesian company, it already has to battle comparatively higher costs, CEO Aparna Saxena told This Week in Asia – making it ill-equipped to compete with low-cost Chinese manufacturers who are notorious for reproducing designer gear.

Cheap knock-offs and disposable fast-fashion have flooded the market in Indonesia in recent years, thanks in large part to the meteoric rise of e-commerce sites like Singapore-based Shopee and Lazada, and Jakarta’s own Tokopedia.

It’s become such a problem that even Indonesian resellers – who profit from the selling of cheap goods bought overseas – are now concerned about being undercut themselves, according to Dr Astrid Meilasari-Sugiana of Jakarta’s Bakrie University, who studies micro, small and medium-sized enterprises (MSMEs).

Inside TikTok’s Singapore offices. The social-media giant is spending billions to carve out a slice of Southeast Asia’s e-commerce pie. Photo: EPA-EFE

TikTok, which is spending billions to carve out its own slice of Southeast Asia’s e-commerce pie, has felt forced in recent months to assure a concerned Indonesian government that it would not roll out its “Project S” initiative in the country.

The Chinese short-video app has already found success with its pivot to e-commerce in Southeast Asia by allowing users to sell goods via the platform, but now wants to sell its own-brand products through Project S, in a move similar to JD.com’s “Made by JD” line or Amazon Basics.

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