Indonesia is sending a clear message to foreign e-commerce platforms, particularly those linked to China, even as it stops short of an outright ban, according to market analysts Momentum Works.

It is noted that Finance Minister Purbaya Yudhi Sadewa on Saturday voiced concerns over the growing dominance of Chinese products and platforms in Indonesia’s digital commerce ecosystem.

He cited numerous public complaints about the prevalence of low-cost imported goods from China on local platforms.

“If this continues without intervention, it would be as if we are handing over our domestic market directly to China,” Purbaya said, adding that the government is formulating strategies to ensure domestic products can “compete and regain prominence in our marketplaces.”

Momentum Works notes that this is the first time a senior-ranking government minister has publicly addressed the issue, highlighting the seriousness of concerns over foreign influence in Indonesia’s e-commerce sector.

The consultancy points to a precedent in 2023 when Indonesia’s then Minister of Cooperatives and SMEs, Teten Masduki, suggested banning TikTok Shop.

Although initially perceived as a minor signal due to his limited regulatory authority, a few weeks later the government implemented a ban, catching ByteDance, TikTok Shop’s parent, by surprise.

ByteDance subsequently negotiated the acquisition of the struggling Tokopedia from GoTo Group, turning potential adversaries into advocates.

Momentum Works emphasizes that foreign e-commerce platforms must navigate Indonesia’s complexities carefully.

It is noted that Shopee historically relied on local management teams, invested in training micro, small, and medium enterprises (MSMEs), facilitated exports, and limited certain cross-border flows to align with government priorities.

Since its acquisition of Tokopedia in 2023, TikTok Shop has adopted similar tactics to address regulatory concerns.

The consultancy expects TikTok Shop to engage closely with regulators to avoid repeating the 2023 debacle.

With a new administration in place and global economic conditions more uncertain, Momentum Works believes the room for misreading policy signals is smaller than before.

Market trends underline the stakes. In 2024, Shopee held an estimated 46 percent market share in Indonesia, while TikTok Shop accounted for around 11 percent.

Momentum Works reports that TikTok Shop has more than doubled its gross merchandise value (GMV) since then, closing in on Shopee’s share, particularly for premium and branded goods still preferred on Tokopedia.

Across the region, governments are increasingly regulating cross-border e-commerce.

Thailand has imposed VAT on small-value online imports, while Vietnam’s new e-commerce law, effective July 1, 2026, shifts verification and taxation responsibilities onto platforms.

Momentum Works highlights that, in Indonesia, cross-border busines to consumer (B2C) e-commerce is relatively small, but 70 percent to 80 percent of goods sold on domestic platforms are still manufactured in China.

According to Momentum Works, regulations and taxation may curb opportunistic imports, but they do not change the underlying supply structure.

The bigger question is whether Indonesia can build a domestic supply ecosystem capable of competing with global supply chains or whether foreign suppliers will continue to adapt and re-enter in new forms.

Purbaya’s statement, Momentum Works concluded, signals that while Indonesia may not be banning Chinese e-commerce outright, the government is asserting stronger oversight to protect domestic players.

For platforms like TikTok Shop and Shopee, successfully navigating Indonesia’s evolving regulatory landscape will require balancing growth with local engagement and compliance, it added.

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