This content is from: Local Insights

Indonesia: E-commerce policy

Oene MarseilleEmir Nurmansyah

In October this year, Indonesia released a policy roadmap intended to support and encourage growth in the national e-commerce market. This market is expected to reach $130 billion by 2020.

The roadmap will serve as a policy guide to the relevant governmental agencies in formulating and implementing regulations in this area. It covers eight areas: funding; taxation; consumer protection; human resource development; logistics; infrastructure; security; and oversight.

The roadmap envisions that government-subsidised loans (known as KUR) will play a factor in providing funding to e-commerce start-ups. This is in addition to money from venture capital firms, angel investors and other sources, including crowdfunding.

The government also anticipates providing some form of tax reduction to local investors investing in e-commerce start-ups, as well as the e-commerce entities themselves. The government has also promised equal tax treatment for both domestic and foreign players.

The roadmap aims to enhance the national logistical system to increase delivery efficiency in terms of both time and cost. This includes a vision to restructure and modernise PT Pos Indonesia, the national post company.

The roadmap also prioritises broadband internet development and penetration in all areas of Indonesia and setting up a national oversight system for e-commerce transactions and cyber securities. It is part of a series of economic policy packages issued under President Joko Widodo, designed to increase Indonesia's economic competitiveness.

Indonesia's senior economic minister has stated that there are currently 93.4 million internet users in Indonesia and 71 million smartphone users. The roadmap has been developed with the goal of making Indonesia the largest digital economy in southeast Asia by 2020, with thousands of so-called tech entrepreneurs locally, and an e-commerce value of $130 billion.

Oene Marseille and Emir Nurmansyah

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