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Hi readers,
There has recently been a lot of discussion in Indonesia about Temu’s plan to enter the market. Many are against the Chinese ecommerce giant’s goal, including the government.
Three ministries have voiced their opposition to Temu’s presence in the country. They are the Ministry of Trade, the Ministry of Communication and Informatics, and the Ministry of Cooperatives and Small and Medium Enterprises.
This stems from their desire to protect local businesses, considering that the company’s model relies on cross-border ecommerce and sources its goods from China.
Shopee and Lazada have already discontinued their cross-border services in Indonesia, while AliExpress has stopped shipping to the country since the end of last year. With Temu’s current framework, it’s difficult to imagine how it could penetrate this market.
Competition in Indonesia’s ecommerce space may have intensified – especially with the rapid rise of TikTok Shop over the past two years – but investments in this sector have continued to plummet this year. The figure is the lowest in the past decade, according to the Tech in Asia database.
Indeed, it will be interesting to see if the sector will witness large investments again, like those previously secured by Tokopedia and Bukalapak.
— Jofie Yordan, journalist at Tech in Asia
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