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Back to topIn 2024 Indonesia issued a White Paper on national strategy to develop Indonesia's digital economy by 2030. The strategy includes support for digital transformation in the trade sector while protecting the interests of Indonesian consumers and micro, small and medium enterprises (MSMEs).
WHITE PAPER ON DIGITAL TRANSFORMATION
The White Paper on National Strategy for Indonesia's Digital Economy Development 2030 (White Paper) sets out the strategic steps to support Indonesia's national digital transformation until 2030.1
The White Paper contains six main pillars for the development of Indonesia’s digital economy: (i) infrastructure; (ii) human resources; (iii) business climate and cybersecurity; (iv) research, innovation and business development; (v) funding and investment; and (vi) policy and regulation.2
The White Paper includes several trade sector initiatives to promote the use of innovative digital/smart technologies to improve productivity, which are summarised here.
1. Promoting development of smart retailer stores
One initiative is the development of smart retailer stores that use immersive technology such as augmented reality (virtual try on), smart warehouses and drone-based delivery to create a unique shopping experience and increase productivity.
This also offers opportunities for collaboration with startups to accelerate the development of smart retailer stores in Indonesia, which in turn are expected to raise awareness among retailers and the public of the benefits of adopting smart store technology. The initiative targets one pilot smart store (“lighthouse”) by 2025, two more by 2027, and three more by 2030.3
We anticipate that this initiative will encourage digital innovation in the Indonesian trade sector in line with national digital strategy, and so accelerate digital transformation in the trade sector. In this way, digital trade businesses can anticipate technological developments and pay attention to supporting legal aspects, thus staying competitive while complying with applicable regulations.
Smart retailer stores have already been implemented in various other countries.
2. Developing a national trade gateway to connect sellers to e-commerce
Another initiative set out in the White Paper is developing an open protocol for e-commerce connecting sellers on various platforms through a unified gateway. This supports development of a protocol to standardise the entire operation process, encompassing catalogue creation, inventory management, ordering, and order fulfilment, among other things. The initiative also aims to support both increased participation by digital MSMEs and expanded consumer choice.
The initiative's target timeline includes developing a unified payment interface and establishing an organisation by 2025, to be followed by launching the protocol and connecting five e-commerce platforms with the protocol by 2027. By 2030, ten e-commerce platforms are expected to be connected to the protocol.4
3. Strengthening e-commerce regulations
Improving Indonesia’s e-commerce regulations will ensure that the behaviour of business players in the marketplace is in accordance with regulations that enhance consumer protection and encourage fair business competition. In addition, e-commerce platforms must verify the goods sold and integrate with government systems to monitor distribution of their goods. This in turn encourages introduction of a complaints mechanism allowing consumers to make complaints directly to the government.
The draft regulation is expected to be finalised during 2025 and issued in 2026.5
2023 E-COMMERCE REGULATION
In line with the vision contained in the White Paper, Minister of Trade Regulation No. 31 of 2023 on Business Licensing, Advertising, Guidance, and Supervision of Business Actors in E-Commerce (MOTR 31/2023) was issued as part of the government's efforts to accelerate digital transformation in the trade sector. This regulation also aims to strengthen consumer protection and create a fairer and more competitive business climate for all business players, aligning with what is set out in the White Paper.
The White Paper emphasises compliance with all prevailing regulations. This includes MOTR 31/2023.
INTERVIEW WITH MINISTRY OF TRADE
To delve deeper into Indonesian government efforts in relation to digital trade, in August 2024 we interviewed Rifan Ardianto, Director of Trade through Electronic Systems and Trade in Services at Indonesia’s Ministry of Trade. Consistent and effective law enforcement is an important foundation for achieving sustainable digital economy development in Indonesia, and socialisation of the new regulations will help ensure all parties understand and comply with them, as explained during the interview, which was conducted in the Indonesian language (with English subtitles) and can be viewed here:
Endnotes
1 Coordinating Ministry for Economic Affairs of the Republic of Indonesia (6 December 2023): https://ekon.go.id/publikasi/detail/5533/luncurkan-buku-putih-strategi-n...
2 Page 12 of the White Paper
3 Page 70 of the White Paper
4 Page 70 of the White Paper
5 Page 84 of the White Paper
