The Government Will Support Indonesian E-Commerce Industry, by Shutting It Down

There’s a reason why the E-commerce Legislation Draft issued by the Ministry of Trade which went into public test a couple of days ago drew negative responses from e-commerce players. Through this draft, the government claims to support the growth of e-commerce industry in Indonesia while protecting the players in it.

Although the Ministry of Trade claimed that they’ve shared the draft to public and association, idEA, the association for e-commerce players, denied that they’ve received it. One of articles stated in the draft states that whoever wants to be online merchant or shopper must go through a verification phase commonly called KYC (Know Your Customer).

In brief, this KYC process requires online merchants and shoppers to verify their data by inputting their ID and TIN Number. And if you think that it’s absurd enough, you are welcome to join a fleet of e-commerce players who’re still questioning about how that KYC can push the industry forward.

This is what will happen should the draft comes into force.

Everytime you want to sell something at Tokopedia, Bukalapak, Kaskus or OLX, you must verify your citizenship by providing your ID/TIN Number. If you find that this is too complicated, Facebook, Instagram, eBay or Craigslist would be at your service.

Same thing applies everytime you want to purchase something from forementioned e-commerce players. The Ministry of Trade does so to enable them tracking each and every online transaction, while monitoring the tax that may potentially take place, as well as protecting consumers and keeping them away from online fraud. Again, if you think that it’s too much, then you may go to AliExpress, Amazon, eBay or other websites that aren’t included into the regulation’s scope.

As for e-commerce players whose services are within the regulation’s range, I predict that many will choose to move their entity abroad, probably Singapore, Malaysia, or other neighboring countries who are free from such regulation, saying goodbye to ethics and patriotism.

Such draft should aim to encourage the growth of e-commerce industry in Indonesia. I personally can’t find the logic behind this legislation, but I hope that one day, I will look back and say, “wow, it did work”. Until that time comes, I find it better to stay away from Indonesian e-commerce industry.