ce on imported goods,” Simon Torring, co-founder of Cube Asia, a Singapore-based e-commerce consulting firm, told Inside Retail. “That simply violates Indonesia’s policy stance of seeking to curb consumer imports of non-essential goods.”  “Indonesia has traditionally adopted a protectionist stance in regulating e-commerce, and this ‘preemptive ban’ of Temu fits this policy well.” According to Torring, Indonesia’s protectionist stance is mainly angled at protecting domestic merchants and sellers versus overseas ones, rather than protecting local e-commerce platforms versus overseas ones.  Indonesia has adopted regulations to curb cross-border e-commerce for several years, most recently through last year’s ban on in-app transactions on social media which caused TikTok Shop to halt transactions on its app before resolving the problem through an acquisition with local tech giant GoTo’s e-commerce unit.  While the bans on Temu and TikTok Shop seem similar on the surface, the underlying reasons for these decisions reveal distinct narratives. “The ban of TikTok Shop was – at least officially – about Indonesia seeking to keep social media and e-commerce separate,” he said. “The same package of regulation included a sweeping ban on cross-border e-commerce, but that was a separate part of the regulation,” Torring said. “The pre-emptive ban of Temu is likely happening because Temu is known for relying almost completely on cross-border imports – something Indonesia is well known for being against.” To Torring, one way to solve this problem would be for Temu to adopt a marketplace model more similar to that of Shopee, Lazada, and TikTok Shop, where the platform works with local merchants and traders to import and list goods on the platform.   “Temu already allows local sellers to list on their platform, but there is no doubt that Temu is still focused on listings from Chinese manufacturers and wholesalers with shipping from China – which won’t work in Indonesia,” he said.  According to a report by Google, Temasek Holdings, and Bain & Co, Indonesia’s e-commerce sector is projected to grow from US$62 billion last year to approximately $160 billion by 2030.  “The protectionist e-commerce policy stance of Indonesia is well-known and has been established for some time. For that reason, the current e-commerce landscape in Indonesia already reflects the protectionist policies, and the pre-emptive ban of Temu is not likely to affect Indonesia’s e-commerce landscape much,” he added.  Rapidly expansion After expanding into Malaysia and the Philippines, Temu entered the Thai market in August. Within two months, the company launched in Vietnam and Brunei, bringing its presence to five Southeast Asian countries. Despite this swift expansion, Temu is struggling to gain significant market share in these regions. Torring expects the market reaction to be less dramatic than what has been seen in Europe and the US based on Temu’s performance in Malaysia and the Philippines, where it has gained some, but not a significant amount of, market share. Broader concerns Temu’s business model has raised concerns in several countries about unfair competition, as it connects customers directly with Chinese factories to reduce prices. Shortly after Temu’s launch in Thailand, local media reported that the country’s authorities were tightening regulations on the company. “That is because cross-border e-commerce, for instance via platforms like Temu and Shein, has reached enormous volume in many markets,” Torring said, adding that such consumer imports have generally been exempt from tax and duties in most markets, and governments/regulators are now realising that such exemptions have negative consequences for local manufacturers, traders, and retailers. “We should expect to see more scrutiny and curbs of cross-border e-commerce going forward, at least to attempt to balance the competitiveness of cross-border and domestic sellers,” he said.