Lazada, the prominent Southeast Asian e-commerce marketplace under Alibaba’s umbrella, is stepping up to support sellers affected by Indonesia’s recent e-commerce regulatory changes. In a town hall meeting, Lazada’s Indonesia CEO, James Chang, conveyed the company’s commitment to assisting sellers during these challenging times.
As part of its efforts, Lazada has taken immediate action by waiving fees for all sellers engaged in livestream sales within Indonesia. This move aims to alleviate the burden faced by micro, small, and medium-sized enterprises (MSMEs) grappling with the repercussions of the regulatory changes.
James Chang emphasized, “For micro-, small and medium-sized enterprises impacted by the recent regulatory changes, we are supporting them by onboarding them to Lazada.” This gesture underscores Lazada’s dedication to fostering a supportive environment for sellers in Indonesia.
Indonesia has recently tightened regulations on social media platforms that facilitate e-commerce transactions, citing the need to protect domestic businesses. President Joko Widodo expressed concerns about foreign imports flooding the market through these platforms, adversely affecting local businesses.
In response to the regulatory shift, TikTok Indonesia announced its compliance with local laws, committing to cease facilitating e-commerce purchases. The move signifies the evolving competitive landscape in Indonesia’s digital market.
During the town hall meeting, James Chang expressed optimism about the regulatory changes, noting that they could lead to “a more positive, healthy competitive landscape for our industry’s long-term growth.” In a bid to attract new sellers, Lazada is offering enticing incentives, including a three-month seller commission waiver, two months of free shipping, and 300,000 Indonesian rupiah ($19.19) worth of seller solutions credit.
TikTok, with its unique ability to drive impulse buying through content, has emerged as a formidable competitor in Indonesia’s e-commerce arena, recording significant gross merchandise volume in 2022.
Lazada currently holds the position of the third-largest player in Indonesia, with a 10% market share, trailing behind Shopee (36%) and GoTo’s Tokopedia (35%), as reported by tech research firm Momentum Works. Indonesia’s e-commerce market is a powerhouse in Southeast Asia, contributing 52% of the region’s total gross merchandise volume last year.
Under the new regulations, the Indonesian government mandates a minimum price of $100 for certain items directly purchased from overseas on e-commerce platforms. All products must adhere to local standards, reflecting a commitment to safeguarding domestic industries.
Citi analysts suggest that these changes may ultimately limit the dominance of foreign e-commerce in Indonesia, aligning with policies seen in other global markets. As Lazada continues to support local businesses and sellers, it remains an integral part of Indonesia’s thriving e-commerce landscape.
