New Rules! Shopee And Lazada Will Both Be Affected Now
Jayson 24 Nov 2023 09:03
According to media sources, the Indonesian Ministry of Cooperatives and Small and Medium Enterprises is proposing additional regulations on e-commerce transactions. One of them is to prohibit platforms such as Shopee, Lazada, Tokopedia, and other platforms from using "low-price strategies" to create cheaper product prices.
Teten, Minister of Cooperatives and Small and Medium Enterprises, said that in the future, e-commerce platforms will no longer be able to use "low-price strategies" to increase market share in the competition among e-commerce companies in the Indonesian market. So far, small, medium, and micro enterprises in the physical (offline) market have not been able to compete because the prices of e-commerce products are too cheap.
He believes that e-commerce platforms have been deliberately engaging in "price wars" to increase market share by subsidizing product selling prices and shipping costs.
"As far as the competition among e-commerce is concerned, [the low-price strategy] seems fine, but it has hit small, medium, and micro enterprises. Can Tanah Abang compete with clothing priced at 100 dong on TikTok? Obviously not," he explains. As a result, Teten said he would regulate trade digitally.
In the future, HPP will be determined by certain product industry associations rather than by the government. Teten believes this provision could be a strategy to prevent product dumping in e-commerce.
Teten explained that the proposed additional regulations are planned to be incorporated into the revised Trade Minister Regulation No. 31/2023 in the coming months.
“It has been proposed, but since the trade regulations have just been published, we will add it after three months (since the publication of Trade Minister Regulation No. 31/2023),” he said.
Teten, Minister of Cooperatives and Small and Medium Enterprises, said that in the future, e-commerce platforms will no longer be able to use "low-price strategies" to increase market share in the competition among e-commerce companies in the Indonesian market. So far, small, medium, and micro enterprises in the physical (offline) market have not been able to compete because the prices of e-commerce products are too cheap.
He believes that e-commerce platforms have been deliberately engaging in "price wars" to increase market share by subsidizing product selling prices and shipping costs.
"As far as the competition among e-commerce is concerned, [the low-price strategy] seems fine, but it has hit small, medium, and micro enterprises. Can Tanah Abang compete with clothing priced at 100 dong on TikTok? Obviously not," he explains. As a result, Teten said he would regulate trade digitally.
In the future, HPP will be determined by certain product industry associations rather than by the government. Teten believes this provision could be a strategy to prevent product dumping in e-commerce.
Teten explained that the proposed additional regulations are planned to be incorporated into the revised Trade Minister Regulation No. 31/2023 in the coming months.
“It has been proposed, but since the trade regulations have just been published, we will add it after three months (since the publication of Trade Minister Regulation No. 31/2023),” he said.
