Jakarta. The government is taking steps to regulate cross-border online trading to protect small and medium enterprises (SMEs) from unfair competition from e-commerce retailers. 

One of the proposed measures is to impose a minimum price cap of $100 on imported items to be sold in the Indonesian online marketplace.

"There must be a minimum price cap of $100 on imported goods. Products with prices cheaper than that should be denied entry [to Indonesian e-commerce platforms]," Cooperative and SME Minister Teten Masduki said in Jakarta on Thursday.

In addition to the price cap, Indonesian e-commerce retailers will be prohibited from facilitating cross-border trade to create a level playing field with SMEs and to comply with existing regulations. 

The minister argued that Indonesian SMEs are required to obtain distribution permit and supplementary licenses such as the SNI (Indonesian National Standard) and halal certification if they want to sell imported goods in Indonesia. A similar rule must apply to online retailers.

Online retailers will only be allowed to sell products from overseas suppliers if those items have been properly imported in accordance with existing trade regulations before being offered for sale online. 

Teten said e-commerce operators will not be permitted to act as both retailers and sellers of products from their affiliates. This restriction is intended to avoid situations where e-commerce platforms prioritize their own products or those of affiliated sellers, creating an unfair advantage in the marketplace.

“If they act as traders, the algorithms will be directed to prioritize their own products and e-commerce customers will buy mainly from them or affiliates of the platform,” Teten said.