Business actors and the textile industry in West Java are threatened with stopping production due to the impact of predatory pricing practices on social commerce platforms. The practice of predatory pricing is really starting to be felt, especially by textile business actors who are experiencing a decline in demand, thereby suppressing turnover and even further impacting on decreasing production and layoffs (PHK) for MSME employees. In Bandung district, Majalaya subdistrict, West Java, for example, as an area where residents run textile businesses on weekdays, production activities are busy. However, since Eid until now, the decline in production has continued to occur until several factories are no longer able to continue producing.
During his visit to several textile factories in Majalaya, the Minister of Cooperatives and SMEs, Teten Masduki witnessed firsthand the current conditions of the factories and received complaints from several textile SMEs in Bandung Regency.
Together with apparel and textile industry players, we discussed this matter and indeed there was a quite drastic decline because MSME players who produce Muslim clothing, headscarves, ready-made clothing sold in wholesale markets such as Tanah Abang, ITC Kebon Kelapa, Andir Market were observed to have dropped. "As a result, demand for clothing, fabrics and textiles has decreased drastically," said Teten.
Teten said that their products were unable to compete not because of quality, but because of the price which was not included in the Cost of Goods Sold (HPP) of textile SMEs/IKMs who were unable to compete.
"I received information that there are indications of rampant uncontrolled imports of ready-made clothing and textile products. These low prices are predatory pricing on online platforms, hitting offline traders and the convection production sector as well as the textile industry being flooded with very cheap products from abroad," said Teten .
According to Teten, this also happened because it was driven by security regulations that did not work properly. For this reason, the Government is trying to improve and coordinate with the Minister of State Secretary for future steps.
Because once again, this authority lies with the Ministry of Trade (Kemendag) and the Ministry of Finance (Kemenkeu). President Jokowi has also said that there will soon be a law regulating it. The President has said that he will review online trading, which will be discussed in the near future. "That includes what we have proposed in Minister of Trade Regulation Number 50 of 2020, it's already finished, it just needs to be stipulated," said Teten.
Not only that, Teten also feels the need for a special HPP for textile products. Because in China itself, they apply a model that goods entering there cannot be below COGS. "If we implement it, it can protect domestic industry," explained Teten.
