Ecommerce in Indonesia

Indonesia is building a roadmap to develop its ecommerce sector. Currently several billion in value, ecommerce still only comprises 1% of the national economy, despite growing at 17% per year. A new Presidential Regulation No. 74 of 2017 on the 2017-2019 E-Commerce Roadmap sets out 8 programs to drive ecommerce growth. These include:

1. Investment and funding rules to encourage foreign and domestic growth
2. Tax rules simplification – especially as regards offshore platforms accessible locally and the establishment of tax domicile
3. Consumer protection and digital payment systems
4. Education and HR, including start up incentives and incubation and small enterprise support
5. Infrastructure upgrades – to improve Internet speeds, networks and security
6. E-logistics and shipping systems
7. Cyber security both to protect e-transactions and to act against cybercrime
8. Forming an ecommerce supervision team in the Coordinating Ministry for Economic Affairs

A number of interrelated areas are not covered, as they have separate pre-existing regulations –

• Safe harbour, liability and online IP violation
• Data privacy and protection
• National E-payment system
• Provision of Over the Top Services, that is overseas providers offering e-services in Indonesia from offshore

The new rules are ambitious in seeking to drive ecommerce growth in the sector. Indonesia will runs ecommerce alongside traditional retail for many years. Modern retail is now flat. The hope is that in such a diverse scattered archipelago, ecommerce can spread faster and farther and modernise many remoter parts of the country. For traders, the possibility of accessing two hundred million consumers is mouth-watering.