The government officially prohibits social-commerce practices, meaning it does not allow buying and selling transactions on social media (social media) platforms. This is stipulated in the Minister of Trade Regulation (Permendag) No 31/2023 concerning Business Licensing, Advertising, Guidance and Supervision of Business Actors in Trading Through Electronic Systems which was promulgated and takes effect from 26 September 2023. In addition, this Minister of Trade Regulation sets the cheapest price for imported goods that can be sold on e-commerce platforms at US$100, the Freight on Board (FOB) price. Which is regulated in article 19 of Minister of Trade Regulation No. 31/2023.

Not only that, imported goods must also meet domestic regulations, such as SNI and other standards required domestically.

And, Article 21 of Minister of Trade Regulation No. 31/2023 also prohibits e-commerce trading while acting as a producer. "PPMSE with a Lokapasar (Marketplace) and/or Social-Commerce business model is prohibited from acting as a producer in accordance with the provisions of laws and regulations in the field of goods distribution."

This provision is intended so that the business chain related to e-commerce is not completely controlled by a certain party.

Responding to the issuance of Minister of Trade Regulation No. 31/2023, General Chair of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI) Redma Gita Wirawasta admitted that he appreciated the government's quick steps to regulate social-commerce.

"Hopefully it can be implemented in the sense that the rules can be enforced," he said, quoted Friday (29/9/2023).

"However, another thing that has never been touched upon is the enforcement of regulations regarding imports which has caused illegal imports to spread and flood the market," said Redma.

He said that imported goods circulate freely at low prices. This sparked suspicions that the goods had entered Indonesia illegally.

"Because we know that on online market place platforms there are also cheap imported goods at unreasonable prices. And they must have been imported illegally," he said.

"So it would be good to make improvements not only at the retail level, but also at the supplier of imported goods," added Redma.

Separately, President of the Confederation of Indonesian Trade Unions (KSPN) Ristadi expressed the same thing.

"Our largest member base is in the textile and textile products (TPT) sector and we consider this policy to be inappropriate," he said.

The reason, explained Ristadi, is that many textile factories in the country have closed because orders have fallen or there are none at all. As a result, goods that were produced were not sold.

"Export-oriented factories are facing the effects of global economic contraction. Meanwhile, local market-oriented factories are being eroded by imported products whose prices are cheaper. Both legal imports are recklessly entering here, and illegal imports," said Ristadi.

"This means that the upstream problem is foreign TPT goods which are cheaper, especially from illegal import routes," he added.

According to Ristadi, banning social-commerce will only revive conventional trade or transactions.

"Markets such as Tanah Abang Market, Tumpah Market and other markets will grow again. However, the goods that are sold are still very cheap goods and these mainly come from imports, illegal imports," he explained.

"This means that domestically produced TPT goods will still not sell. The national textile industry will still not be able to recover. Factories will close and layoffs will continue to occur," said Ristadi.

Read: Official social media does not allow e-commerce, this is the message from the Minister of Trade to MSMEs

He also hopes that the government will seriously stop the entry of illegally imported goods whose prices are cheaper than domestic products.

"Social-commerce is quite limited to transactions of domestic products. Thus, the domestic market, which has a niche of up to 280 million people, is filled with domestic products," said Ristadi.

"That way, the factory will continue to exist and grow. So that there will be no more waves of layoffs, and people's purchasing power will be maintained. The effect will be stable economic growth," he concluded.