Indonesia Urges Apple and Google To Restrict Temu

Indonesia Urges Apple and Google To Restrict Temu: Key Insights

• Government Protection Efforts: Indonesia aims to shield small and medium-sized businesses from low-priced products sold by Temu, emphasizing the need to protect local enterprises.

• Concerns Over Temu's Business Model: Temu's strategy of shipping products directly from Chinese factories has raised alarms about “unhealthy competition” and the impact on local markets.

• Lack of Responses and Future Actions: Temu, Apple, and Google have not commented on Indonesia's requests, while the government plans to block Temu's investments and consider similar actions against Shein.

Indonesia's eCommerce has been growing steadily over the past year. And officials are determined to keep it that way. The Indonesian government wants to protect Indonesia's small and medium-sized businesses from the low-priced products sold by Temu (Chinese company owned by PDD Holdings), Communication and Information Technology minister Budi Arie Setiadi told Reuters. He noted that authorities haven't seen any transactions from local users on the platform yet. Indonesias eCommerce is growing constantly

Is Temu a Threat?

Temu’s growth has raised concerns over its cheap business model of shipping parcels from China. Temu’s business model, which connects consumers directly with factories in China to lower prices, is “unhealthy competition”, the minister said. “We’re not here to protect eCommerce but we protect small and medium enterprises. There are millions we must protect,” he added. Budi also said the government will request a similar block for Chinese shopping service Shein. Jakarta will also deny Temu’s investment in local eCommerce.

Temu, Apple and Google Did Not Respond

So far, none of the participants have responded to Indonesia's request: Temu, Apple, and Google did not comment on the matter. A spokesperson for Shein stated that they do not operate in Indonesia. It seems unlikely that Apple or Google will take action against Temu, as both companies receive marketing funds from them. So, is Temu safe in Indonesia?

Deals with ByteDance

Not entirely. Last year, Indonesia required China’s ByteDance to shut down TikTok's eCommerce service in the country to safeguard local merchants and user data. A few months later, TikTok agreed to acquire a majority stake in the eCommerce division of Indonesia's tech giant GoTo to maintain its presence in Southeast Asia's largest eCommerce market. According to ECDB data, Indonesia’s eCommerce sector is projected to grow from US$71 billion in 2023 to US$199 billion by 2028.