Indonesia has prohibited ecommerce platform Temu, citing concerns over potential disruptions to the country’s micro, small, and medium enterprises (MSMEs).

Indonesia’s Minister of Communications and Informatics Budi Arie Setiadi said the platform’s direct sales model could jeopardize local vendors’ livelihoods, particularly hurting smaller businesses that form the backbone of Indonesia’s economy.

According to Indonesia’s trade regulations, ecommerce transactions must involve intermediaries, an obligation that Temu’s factory-to-consumer sales model does not fulfill.

Trade Ministry official Isy Karim previously said Temu’s business approach contradicts Indonesia’s established trade policies.

Temu, managed by PDD Holdings, parent of the popular online retailer Pinduoduo, has sought to enter the Indonesian market since at least September 2022.

At a recent ecommerce expo in greater Jakarta, Temu’s bid to penetrate the Indonesian market attracted scrutiny.

However, Budi expressed firm opposition, asserting that the platform’s entry would threaten the sustainability and productivity of local MSMEs while undermining the broader Indonesian economy.