Lazada, which is an e-commerce marketplace in Southeast Asia owned by Alibaba, is actively seeking sellers affected by Indonesia’s latest e-commerce regulation. This information was shared by the Indonesia CEO James Chang during a town hall meeting. Chang mentioned that starting Tuesday, the company has waived fees for all sellers in Indonesia who specifically engage in livestream sales on Lazada. He further stated that they are providing support to micro, small, and medium-sized enterprises impacted by the recent regulatory changes by onboarding them to Lazada.
Recently, Indonesia has been taking measures to regulate social media platforms that facilitate e-commerce, including TikTok, in order to protect domestic businesses. Indonesian President Joko Widodo expressed concerns that the influx of foreign imports, made available through such platforms, has contributed to a decline in sales for domestic businesses. As a result, Indonesia imposed a ban on social media purchases and gave TikTok a deadline to become a standalone app, without any e-commerce features, or face closure.
Responding to the regulatory changes, TikTok Indonesia announced its compliance with local laws and its decision to stop facilitating e-commerce purchases. During the town hall meeting addressing Indonesian employees, Chang highlighted that these recent regulatory changes have created a more positive and healthy competitive landscape for long-term growth in their industry. Additionally, he mentioned that new sellers who sign up on their own will enjoy zero seller commission for three months, zero free shipping fee for two months, and seller solutions credit worth 300,000 Indonesian rupiah ($19.19).
TikTok poses a growing threat to e-commerce giants Lazada and Sea Limited’s Shopee in Indonesia and the region. With a $2.5 billion gross merchandise volume in Indonesia in 2022, TikTok leverages impulse buying from its content viewers.
According to Momentum Works, Lazada holds a 10% market share, trailing behind Shopee (36%) and GoTo’s Tokopedia (35%).
Indonesian government regulations now require e-commerce platforms to enforce a minimum price of $100 for certain overseas purchases.
The closure of TikTok may benefit existing players in the space, but it aims to limit the dominance of foreign e-commerce and imported goods in Indonesia. The government’s protection of local champions aligns with policies observed in China, the U.S., and India. Lazada emphasizes that the platform primarily consists of local businesses and sellers catering to Indonesian shoppers.
(Sheila Chiang | CNBC)
