Jakarta, Indonesia Sentinel — Indonesia’s Ministry of Communication and Information Technology (Kominfo) has blocked the popular e-commerce app Temu, citing its failure to register as an Electronic System Provider (PSE) in the country. The app, which gained viral popularity, has faced criticism for allegedly harming local small and medium-sized enterprises (SMEs).
“We took down Temu in response to concerns from the public, particularly from SME owners. Moreover, Temu was not registered as a PSE,” said Minister of Communication and Information Technology Budi Arie Setiadi in a written statement on Wednesday, October 9, 2024.
The move aims to protect Indonesia’s SMEs from the influx of foreign products, which are seen as a threat both in online and offline sales channels. The government expressed particular concern about the direct sale of foreign products through platforms like Temu, which allows foreign manufacturers to sell directly to consumers, bypassing traditional local markets.
“Local SME products need government protection from foreign marketplaces that sell products directly from factories at very low prices. This creates unfair competition and threatens the sustainability of local SMEs,” Budi added.
Minister of Cooperatives and SMEs, Teten Masduki, had earlier raised concerns about the business model employed by foreign marketplaces, particularly Temu, and its potential impact on local SMEs. According to Masduki, the ability of foreign manufacturers to sell products at extremely low prices poses an existential threat to domestic businesses.
The app, originating from China, has reportedly harmed local SMEs and consumers in various countries. Complaints have also been raised about the poor quality of the products sold on Temu, which often do not meet consumer standards.
Previous Controversies
This isn’t the first time Temu’s parent company, Pinduoduo, has faced issues. In 2023, Google temporarily suspended Pinduoduo due to allegations that the app contained malware capable of monitoring user activities. As a result, Kominfo’s decision to block Temu also comes as a precautionary measure to protect Indonesian consumers from potential security risks.
“We have blocked Temu on both the App Store and Play Store to safeguard both consumers and local SMEs,” said Budi.
Temu Apps from China Registered in Indonesia, Said to be the MSME Killer
Acquisition Speculation Surrounding Bukalapak
Amid the controversy, there have been rumors that Temu may seek to acquire Indonesia’s homegrown e-commerce platform, Bukalapak, as a way to enter the Indonesian market. However, Bukalapak has publicly dismissed these claims.
In a statement, Bukalapak’s Secretary Cut Fika Lutfi clarified, “The company is not aware of any information regarding a potential acquisition by Temu,” she said on Tuesday, October 8, as quoted by CNN Indonesia.
Lutfi added that Bukalapak would comply with information disclosure regulations if any verified information regarding the acquisition became available.
The blocking of Temu highlights Indonesia’s ongoing efforts to protect its domestic market from foreign competition, as well as the government’s commitment to ensuring that all digital platforms comply with local regulations.
(Raidi/Agung)
