Indonesia’s communications minister said on Oct. 11 that the nation had asked Google and Apple to block Temu from their app stores in a bid to protect small businesses.
Temu, a China-based, ultra-low-price e-commerce app, currently operates in only a few Southeast Asian countries. Globally, it’s available in 79 countries. According to a Momentum Works report, its 2023 gross market value was just $100 million in Southeast Asia compared to $16.3 billion in the United States.
In the United States, it has come under fire for links to forced labor. The Chinese Communist Party’s (CCP’s) persecution of Uyghurs and other ethnic minorities in Xinjiang, where about 90 percent of the country’s cotton comes from, is known to involve forced labor.
Google, Apple, and Temu did not respond to inquiries by publication time.
The minister said Temu’s business practices would introduce “unhealthy competition.”
“We’re not here to protect e-commerce, but we protect small and medium enterprises. There are millions we must protect,” he said.
Small businesses make up a large portion of Southeast Asian economies, contributing to 40 percent of GDP, according to consulting firm YCP.
Indonesia’s e-commerce industry is set to expand to about $160 billion by 2030 from $62 billion in 2023, according to a report by Google, Singapore state investor Temasek Holdings, and consultancy Bain & Co.
In Indonesia, 99 percent of businesses are small, and Indonesia is the biggest e-commerce market in the region. Thailand, the second largest, saw Temu launch in July.
Authorities say they have not yet seen transactions by Indonesians on the Temu app, and the move is a preemptive one.
The minister added that it would oppose any Temu plans to enter the Indonesian market through investment as well. When Indonesia last year forced China-based ByteDance and its app TikTok to close its e-commerce function in the country, TikTok instead agreed to buy a majority stake in Indonesian e-commerce company GoTo to stay in the market.
Indonesia formally asked to join the Trans-Pacific trade pact last month, which is made up of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the UK, and Vietnam—a group of Pacific Rim countries that notably excludes China.
The members benefit from low-tariff trade between countries, and experts initially concluded that the pact lacked incentives to attract China. However, the situation has changed. In 2021, China applied to join the pact, and Australia said in 2023 that it would not happen.
Countries have increasingly put up trade barriers against China, citing the CCP’s “predatory“ pricing tactics meant to put global competitors out of business.
Reuters contributed to this report.