Blog > Marketplace News > Indonesian Minister Advises President To Block Temu From Entering Domestic Market
Indonesian Minister Advises President To Block Temu From Entering Domestic Market
Jayson 23 Nov 2023 07:09
According to media reports, Teten, the Indonesian Minister of Cooperatives and Small and Medium Enterprises, is cautious about the e-commerce platform Temu entering the Southeast Asian market, believing that it will affect the development of small, medium, and micro enterprises in the country.
Reports say he has suggested to the president that Temu should be banned from the country's market.
"It has entered several ASEAN countries, but I have told President Joko that this kind of thing should not enter Indonesia. If they enter, small, medium, and micro enterprises will not be able to compete, causing production paralysis, increased unemployment, and further reduced purchasing power, "He said.
Temu works with factories to sell products directly to consumers. This process eliminates the role of dealers, affiliates, and distributors, compressing profits to the extreme, so product prices have an absolute advantage.
“It will definitely eliminate a lot of distributors and there will be a lot of job losses because the price of the product is so low that it's impossible for Indonesian products to compete with it,” Teten said.
Teten's concerns are not unreasonable. One of the reasons why Tiktok Shop was banned previously in Indonesia was that it was suspected of posing a monopoly threat to local small and medium-sized enterprises. It is obvious that Temu is now facing the same test in the Indonesian market.
Temu has also reportedly set a GMV target of $30 billion for next year. Now Temu has entered the Philippine and Malaysian markets and is gradually advancing its layout in Southeast Asia.
Reports say he has suggested to the president that Temu should be banned from the country's market.
"It has entered several ASEAN countries, but I have told President Joko that this kind of thing should not enter Indonesia. If they enter, small, medium, and micro enterprises will not be able to compete, causing production paralysis, increased unemployment, and further reduced purchasing power, "He said.
Temu works with factories to sell products directly to consumers. This process eliminates the role of dealers, affiliates, and distributors, compressing profits to the extreme, so product prices have an absolute advantage.
“It will definitely eliminate a lot of distributors and there will be a lot of job losses because the price of the product is so low that it's impossible for Indonesian products to compete with it,” Teten said.
Teten's concerns are not unreasonable. One of the reasons why Tiktok Shop was banned previously in Indonesia was that it was suspected of posing a monopoly threat to local small and medium-sized enterprises. It is obvious that Temu is now facing the same test in the Indonesian market.
Temu has also reportedly set a GMV target of $30 billion for next year. Now Temu has entered the Philippine and Malaysian markets and is gradually advancing its layout in Southeast Asia.
