Temu supply chain expands in Southeast Asia amid Indonesian ban: Will others follow?
18 Oct 20243 min read
Summary
- Indonesia’s ban has turned low-cost, direct-from-China fulfilment into a regulatory flashpoint, highlighting government concerns over supply chain bypass and the displacement of small merchants.
- Temu’s uneven rollout across Southeast Asia reflects deeper trade-offs between rapid scale, local payments and logistics integration, and varying levels of regulatory tolerance.
- The platform’s reliance on a China-centric sourcing and fulfilment model remains a competitive advantage, but one increasingly constrained by domestic economic priorities and policy responses across the region.
Discount-shopping platform Temu is facing hurdles in Southeast Asia (SEA) following its recent ban in Indonesia in early October, disrupting the Temu supply chain.Authorities in the country implemented the ban to protect micro, small and medium sized enterprises against cheap products on the platform. On October 11, Indonesia also asked Google and Apple to block Temu in their app stores to prevent the app from being downloaded.According to the Indonesian government, Temu’s express delivery model kicks local players out of the supply chain. This is because it allows foreign companies to have extremely low prices that squeeze small traders in Indonesia.
Will SEA follow Indonesia’s lead?
Despite Indonesia’s decision to ban Temu, industry analysts suggest that this move is unlikely to trigger similar actions across SEA in the near future.Indonesia’s regulators have specifically targeted cross-border e-commerce platforms to prevent an oversupply of cheap goods that could harm local industries. However, to experts, SEA has different economic and regulatory environments that reduce the likelihood of similar measures to the Temu supply chain.
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“Indonesia’s economic structure is unique, with MSMEs serving as a backbone of the economy and a major source of employment, which draws particular attention from the government,” said Li Jianggan, CEO of Singapore-based Momentum Works in South China Morning Post.
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