Chinese e-commerce platform banned from Indonesian market

Chinese e-commerce platforms Temu and Shein had planned to expand into the Indonesian market and were also available on the country's Apple and Google app stores, but the Indonesian government directly intervened and banned them from operating in Indonesia due to the potential impact of their business model on local SMEs.These two platforms sell goods directly from Chinese producers to end-consumers without middlemen and at low prices, squeezing the viability of local producers. These two platforms in the US are popular because the price of goods is much lower than the market level, however, the Trump administration's policy poses a threat to them. On the one hand, Trump has set tariffs of 1,45% on Chinese imports; on the other hand, he plans to abolish the "Low Value Goods Duty Free Policy". The policy allows imports worth less than $800 to be exempted from tariffs and customs procedures, helping platforms keep prices low and gain market share. Cross-border e-commerce import and export business is worth 2.63 trillion yuan (6,039 trillion dong), which could be damaged by the abolition of the "duty-free policy for low-value goods" and the expansion of tariffs. Not only are the two platforms affected by the U.S. tariff policy, but also Chinese sellers who rely on Amazon. The head of the Shenzhen Cross-border E-commerce Association said the tariffs have impacted the cost structure of production and distribution, making it difficult for many companies to gain a foothold in the U.S. market. The tariffs have also led to delays in customs clearance and rising logistics costs. Three-fifths of sellers plan to raise prices in the U.S. market by 30%, while two-fifths intend to exit the U.S. market altogether. Some sellers plan to sell out of inventory, reduce Amazon advertising spending and increase the U.S. market selling price; there are also sellers no longer develop new products, that if the situation remains unchanged, the U.S. market is no longer feasible to serve the United States from China, the relevant manufacturing industry should be transferred to Vietnam, Mexico and other countries. In addition, the massive withdrawal of Chinese sellers may put Amazon at risk, and the spending power of other countries is difficult to compare with the United States, Chinese exporters may face more intense price competition, global profitability may decline.