Indonesia to block Temu app to protect domestic businesses By Investing.com

In a move to protect local small and medium-sized merchants, Indonesia’s tech giants Google (NASDAQ:) and Apple (NASDAQ:) have decided to stop Chinese e-commerce app Temu from being downloaded from their app stores for users in the country . Communications Minister Budi Arie Setiadi announced this decision on Friday, citing the need to protect this company from the flood of cheap products offered by PDD Holdings’ Temu.

Although no transactions by Indonesian residents through Temu have been detected so far, the government is taking preventive measures. Temu’s business strategy of connecting consumers directly to Chinese factories and thereby significantly undercutting prices is described by Minister Budi as “unfair competition”.

Minister Budi emphasized that the government is concerned with protecting millions of small and medium-sized businesses, not the e-commerce sector itself. He also suggested that Jakarta would block possible investments by Temu in the Indonesian e-commerce market, although no such plans are known so far.

In addition, the government plans to apply for a similar block on the Chinese shopping service Shein. When contacted, Shein stated that she does not operate in Indonesia.

The move joins Indonesia’s previous efforts to regulate foreign e-commerce companies. Last year, the government forced TikTok to suspend its e-commerce service in the country to protect local merchants and user data. TikTok then convinced TikTok to acquire a majority stake in Indonesian tech group GoTo’s e-commerce unit to maintain its presence in Southeast Asia’s largest e-commerce market.

Regarding the growth of the e-commerce sector, a report by Google, Temasek Holdings and Bain & Co. predicts that Indonesia’s e-commerce industry will grow from $62 billion in 2023 to about $160 billion by will grow in 2030.

So far, neither Temu, Apple or Google have made any statements on the matter. Indonesian e-commerce platform Bukalapak.com on Tuesday denied rumors of a takeover by Temu.

Reuters contributed to this article.

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