Indonesia’s e-commerce landscape is increasingly shaped by three issues that are beginning to redefine market dynamics. Domestic producers face tightening terms of trade. The market is flooded by an imported low-priced commodity, with competitive volume and quality. Digital platforms, which now act as virtual economic infrastructure, are primarily owned and controlled by external players. These three factors are altering competitive balance, raising structural pressures on local industries, and prompting the need for a deeper understanding of how the digital marketplace is evolving.
With the background above, IBC convened a focused discussion on 9 December 2025 to assess how these developments are affecting producers, merchants, and sectoral industries. Participants noted that e-commerce costs have risen sharply in recent years, with some service components increasing by 2 to 3 times, while overall digital operating expenses for merchants have climbed by 19% to 20%, according to figures presented during the discussion. These pressures coincide with the rapid entry of low-priced imports through cross-border and factory-to-consumer models, further intensified by limited algorithmic transparency that affects product visibility and bargaining power for domestic sellers.
The implications for local industry are already visible, around 68% of digital SMEs reported weakening margins, and roughly 43% had at some point halted sales or shifted channels due to rising costs and difficulty maintaining profitability. The structural impact is evident in the textile sector, where approximately 60 firms have closed in the past two years, and an estimated 250,000 workers have been affected, while industry growth remains slow at around 2.79% CAGR through 2030. The beauty sector, which comprises roughly 95% small- and medium-sized manufacturers and supports nearly 60,000 workers, faces increasing pressure from predatory pricing and mislabelled imports that compete directly with local products. These trends reflect how the influx of low-priced goods is reshaping incentives, leading some producers to shift from manufacturing to import trading.
The discussion highlighted several ideas to strengthen e-commerce governance and support domestic competitiveness. Participants emphasized the value of a more coordinated governance structure that could improve oversight, review platform cost structures, strengthen supervision of imported goods, and enhance transparency of algorithmic systems. Suggestions also included integrating SME support through financing schemes, simplifying overlapping regulations across ministries, and exploring longer-term options such as establishing a national digital gateway inspired by international models. IBC plans to continue refining these proposals in upcoming sessions to develop short-, medium-, and long-term actions to help restore balance and strengthen Indonesia’s industrial resilience in the growing digital economy.