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Indonesia imposes $100 price floor for imported goods sold in e-commerce

Jakarta Globe - September 26, 2023

Mohammad Said & Nasori, Jakarta – The Indonesian government is imposing a minimum price of $100 for transactions involving imported goods on online marketplaces under a regulation aimed at safeguarding the interests of local micro, small, and medium-sized enterprises, a senior official said on Monday.

The regulation, issued by the trade minister, also includes provisions to limit the involvement of social media platforms like TikTok in e-commerce activities within their apps.

The decision was made during a special meeting on e-commerce chaired by President Joko "Jokowi" Widodo at the State Palace in Jakarta.

Trade Minister Zulkifli Hasan said imported goods traded on e-commerce platforms must be treated on par with those sold in physical stores and be subject to Indonesian taxes.

"In addition, imported food products must obtain halal certification, imported cosmetics must be certified by the BPOM [Drug and Food Supervisory Agency], and imported electronics must adhere to national standards," he told a news conference shortly after the meeting.

He was accompanied by Cooperative and MSME Minister Teten Masduki and Telecommunication and Informatics Minister Budi Arie who also attended the meeting.

Zulkifli said the minimum purchase value for imported products would be set at $100 to prevent an influx of inexpensive foreign products and protect domestic small-scale industries.

Furthermore, the regulation unequivocally prohibits social media platforms from engaging in e-commerce activities, citing their unfair advantages over conventional online trading platforms in terms of user numbers, knowledge of user preferences, and algorithmic recommendation systems.

This restriction also serves to safeguard the personal data of users from potential misuse by social media operators, considering them as the target market.

While Zulkifli did not specifically mention any company, other ministers and even President Jokowi himself have criticized the video-sharing app TikTok for its livestream shopping activities. TikTok operates in Indonesia solely as a social media platform but has been accused of breaching these boundaries with its e-commerce activities.

Anggini Setiawan, a spokesperson for TikTok Indonesia, said that the company will comply with the trade minister's regulation while arguing that millions of local traders and affiliated content creators rely on TikTok Shop to sell their products.

"We will closely adhere to existing regulations and laws in Indonesia, but we also hope that the government will consider the impact on the six million local traders and nearly seven million affiliated content creators who use TikTok Shop," Anggini told Jakarta Globe's sister publication, Investor Daily.

In a separate statement, Investment Minister Bahlil Lahadalia said TikTok could face expulsion from Indonesia if it continues to engage in livestream shopping in violation of its social media platform business license.

Source: https://jakartaglobe.id/business/indonesia-imposes-100-price-floor-for-imported-goods-sold-in-ecommerc