Indonesia bans the Chinese app that was most-downloaded app in US in 2023

Indonesia said it will continue its ban on the operations of the e-commerce platform Temu , citing concerns that it could harm the country's small businesses. According to a report in Channelnewsasia, Communications and Informatics Minister Budi Arie Setiadi stated that Temu's business model, which involves direct sales from factories to consumers, violates Indonesian trade regulations requiring intermediaries. He emphasized that allowing Temu to operate would negatively impact the economy and society, particularly small and medium-sized enterprises.

The Indonesian government has been closely monitoring Temu's attempts to enter the Southeast Asian market. The platform, owned by PDD Holdings , has faced multiple failed registration attempts due to trademark conflicts and regulatory non-compliance. Temu was the most-downloaded iPhone app in the US in 2023. The Chinese shopping app took over spots previously held by the US tech giant Facebook parent Meta. With its tagline “Shop like a billionaire,” Temu has reportedly captured almost 20% of the US market share, posing a challenge to traditional American retailers such as Amazon.com, Dollar Tree Inc and Five Below Inc.

Temu's business model against Indonesian rules
Temu's business model of selling products directly from factories to consumers is said to be against Indonesia’s trade regulation requiring an intermediary or distributor, the Trade Ministry’s domestic trade director-general Isy Karim said previously. Minister Budi said that allowing Temu in Indonesia could hurt the economy and society.

Temu’s application became a topic of discussion after the company appeared at the 2024 E-commerce Expo held on Sep 24 and 25 in Greater Jakarta.

Temu, which is available in apprximately 60 countries, entered Southeast Asia last year, beginning with the Philippines last August and Malaysia last September. It expanded into Thailand in July this year. In October 2023, Indonesia also banned TikTok Shop , citing the need to protect smaller merchants and user data.