Standardization of Imported Products in E-commerce Needs to be Strengthened

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Standardisasi Produk Impor pada E-dagang Perlu Diperkuat

JAKARTA, KOMPAS – The government needs to strengthen its supervision of the implementation of import product standardization regulations that will be sold domestically, following the establishment of a minimum price of 100 US dollars for imported goods that can be traded on e-commerce platforms. In the long term, the government also needs to have a roadmap for the development of domestic industries so that local products can compete with imported products.

According to Daniel Tumiwa, the Advisory Board of the Indonesian E-Commerce Association (idEA), on Friday (11/24/2023) in Jakarta, the minimum price policy of $100 USD for imported goods to be traded on e-commerce platforms is actually intended to protect consumers. As its goal is positive, the government should strengthen the enforcement of product standardization regulations, such as the Indonesian National Standard (SNI) and the regulations issued by the Food and Drug Monitoring Agency (BPOM).

In addition, he continued, the government should begin to map out a roadmap to advance the domestic industry in order to develop imported products that are in high demand in e-commerce platforms. This development starts from the manufacturing process, product design, to the involvement of micro, small, and medium enterprises (MSMEs) or small and medium industries (SMIs).

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“The managers of e-commerce platforms, such as Lokapasar, usually have data on which products are the most popular among consumers. The government should be able to collaborate with them in order to draft this roadmap,” said Daniel.

Similar views were expressed by Yose Rizal Damuri, Executive Director of the Centre for Strategic and International Studies (CSIS). According to him, the government should focus on enhancing the capacity of domestic industries, such as facilitating products produced by large industries or micro, small, and medium enterprises (MSMEs) to obtain national and international certifications. He believes that there are not many domestic companies that have obtained international product certifications.

Director General of Domestic Trade at the Ministry of Trade (Kemendag) Isy Karim, when confirmed, said, to prevent the flood of imported products on e-commerce platforms, the Ministry of Trade has issued Minister of Trade Regulation (Permendag) Number 31 of 2023 concerning Business Licensing, Advertising, Development, and Supervision of Business Actors in Trading through Electronic Systems. This Minister of Trade Regulation regulates cross border provisions on e-commerce and obligations to fulfill product standardization requirements.

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So far, the policy of limiting finished goods from abroad entering via cross border in e-commerce has been effective in reducing cheap imported goods sold in market places.

Regarding quality, Minister of Cooperatives and Small and Medium Enterprises (SME) Teten Masduki, when contacted on Friday, believes that the quality of local products is not inferior to imported products. Local cosmetic products, for example, have dominated the trade on e-commerce platforms.

“However, local products often lose in terms of price competition due to the non-standardized nature of imported products, with some being dumped or subsidized by global platforms that are directly linked to their producers,” said Teten.

He added that there is no regulation in Indonesia regarding the potential for global e-commerce platforms to monopolize online trade. According to him, Indonesia needs to have such regulations in place to protect local products. The Chinese government is known to have regulated the prices of imported goods and has ensured that they are not sold below the cost of locally produced goods.

Regarding the development of capacity and capabilities for local small and medium enterprises (SMEs), Teten explained that the approach used is a cluster approach. This approach allows for production and distribution of goods collectively. Financing for SMEs will also be developed through the people’s business credit (KUR) cluster model.

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