New e-commerce rules may choke online growth, caution Indonesian executives

Indonesian e-commerce industry executives have criticised new regulations requiring online vendors to obtain government permits, saying the mandatory procedures would sharply increase costs and stifle the country’s booming e-commerce market.

Under a new law introduced last week, all online storefronts, currently estimated at over 10 million, need to seek a permit from authorities in order to sell their goods.

The law also requires online marketplaces to store information in local data centers and for domain names to reflect Indonesia.

Trade minister Agus Suparmanto told reporters on Monday that the regulation is intended to protect consumers and businesses, and promised that “everything will be made easier”, as the procedures to comply with the law can be done online and will be free.