ID logistics firms push for price floor

IN FOCUS

In today’s newsletter, we look at:

• Why some logistics players in Indonesia are hoping for more government intervention
• Why Flipkart can’t rest easy even after its IPO

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Hi there,

I don’t think too much about delivery options when I order something online. I usually go with whatever choice is there – to be honest, I’m not sure whether I’ve even noticed if multiple delivery options are available. I just want my purchase to arrive at the agreed time, without any issues.

Earlier this year, Shopee Indonesia resolved a case with local authorities over accusations that it was prioritizing its in-house logistics service, SPX Express, over other third-party logistics (3PL) players for purchases made on the ecommerce platform.

But as my colleague Jofie notes in this week’s featured story, this settlement, which required Shopee to make it easier for buyers to choose their preferred delivery service, was not enough to satisfy local 3PL players.

One of the players’ leaders told Tech in Asia that they have seen insignificant or no change in shipment volumes since the changes were made.

They are angling the Indonesian government to introduce a price floor that could “create a level playing field” for all players. After all, 3PL players don’t have the same resources as Shopee, which can use revenue from its other businesses to subsidize deliveries.

Yet, as Jofie notes in the story, SPX’s continued popularity may simply come down to both lower costs and better reliability. Should the Indonesian government interfere with pricing, which is the result of supply and demand dynamics?

Personally, I’m a skeptic. This seems like a case of interested parties asking the government to intervene in an industry where many small players simply lack the scale and resources to compete effectively – not just with SPX – but with other providers like J&T Express, which is not connected to any ecommerce platform.

Read Jofie’s article and see if you agree.

On another note, this will be the last edition of The Check Out this year. The next one will be out on January 9, 2025. We wish you a happy and fulfilling holiday season!

— Simon

THE BIG STORY

Indonesian 3PLs say Shopee antitrust fix falls short, urge action

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