E-Commerce Business: New Rules, New Oversight, and New Competition?

The government has issued Trade Minister Regulation No. 31/2023 on electronic trading, which includes new rules for e-commerce and social commerce.

Trade Minister Zulkifli Hasan said that the government has also established a cyber monitoring team consisting of representatives from relevant ministries and agencies. “It consists of the Trade Ministry, the Finance Ministry, the Coordinating Ministry of Economic Affairs, the Cooperatives and Small and Medium Enterprises Ministry, the Industry Ministry, and the Food and Drug Supervisory Agency,” he said on Sept 27.

Zulkifli added that trade organizers who operate through electronic systems (PPMSE), such as marketplaces and social commerce, will face sanctions if they violate the regulations. They will receive three written warnings within 14 days. If they fail to comply within this period, they will be subject to temporary blocking.

The following are some of the main points in Trade Minister Regulation No. 31/2023:

• The regulation defines different business models for PPMSE, such as marketplaces and social commerce, to facilitate guidance and supervision.
• The regulation sets a minimum price of US$100 per unit for finished goods from overseas that are sold directly to Indonesia via cross-border e-commerce platforms.
• The regulation introduces a positive list of goods from abroad that can enter Indonesia directly via the e-commerce platform.
• The regulation imposes special conditions for foreign traders in domestic marketplaces. The requirements include providing proof of business legality from the country of origin, complying with Indonesian national standards, obtaining a halal certificate, and attaching an Indonesian language label on imported products.
• The regulation prohibits marketplaces and social commerce from acting as producers.
• The regulation prohibits data control by e-commerce and its affiliates.