Indonesia’s Crackdown on Illegal Imported Used Clothes: What It Means for E-Commerce and SMEs

Indonesia’s e-commerce landscape has grown rapidly over the past decade, becoming a vital marketplace for small businesses, fashion sellers, and digital-first entrepreneurs. But alongside this growth, one issue has repeatedly surfaced: the circulation of illegally imported second-hand clothes, commonly known as ”pakaian bekas impor”. Despite being officially banned for years, the category continues to thrive, especially through e-commerce, social commerce, and real-time livestream selling.

In early November 2025, the Indonesian government took a firmer stance. The Ministry of SMEs summoned major e-commerce platforms – represented by the Indonesian E-Commerce Association (idEA), including Shopee, Tokopedia, TikTok Shop, and Lazada – to demand that they stop the advertising and sale of imported used clothing online. This move follows the directive of President Prabowo Subianto to curb illegal imports more aggressively. The meeting marked a significant turning point in how Indonesia intends to regulate its fast-growing digital commerce ecosystem.

Why Imported Used Clothes Became a Major Problem

Indonesia’s illegal used-clothes imports have surged dramatically in the last four years. In 2021, only 7 tons were recorded entering the country. By 2023, the number rose to 12 tons. But by 20245-2025, the situation spiraled as 3,000 to 3,600 tons of illegal imported used clothes entered in 2024. Meanwhile, as of mid-2025, authorities estimate 1,800 to 2,000 tons have already come in.

These numbers show that illegal thrifting is no longer a fringe business. It reflects a coordinated import pipeline supported by warehousing, logistics networks and high volume sellers operating across platforms. Official import data also showed over 1,242 tons of used clothing arriving between January and August 2025 alone, valued at more than US$1.5 million.

The government’s concern is rooted not only in hygiene and safety risks but also in the economic consequences for local businesses. Illegal used-clothes imports have significantly hurt domestic textile producers, many of whom are SMEs. According to parliamentary data, the influx of second-hand imports caused the local textile industry to lose around 432,000 tons of market demand in 2022, equivalent to nearly 23% of total consumption.

This decline contributed to a reduction in the textile industry’s workforce, which dropped from 1.13 million workers to 1.08 million within the same period. In addition, state revenue losses associated with illegal imports were estimated at around Rp 19 trillion due to unpaid duties and evaded taxes. These numbers illustrate why authorities are treating the issue as a serious economic threat rather than a simple thrift-shopping trend.

Across 2025, the Ministry of Trade estimated the total value of illegal used-clothing imports they have acted upon at more than Rp 120 billion. These enforcement efforts also revealed that the illicit goods were arriving from multiple countries, including Hong Kong, Taiwan, Malaysia, Singapore, the UAE, and Saudi Arabia, confirming that the issue spans several international supply chains and not just local smuggling activities.

On top of that, enforcement against illegal imports of used clothing in Indonesia has become increasingly difficult due to several overlapping factors: smugglers now use sophisticated methods such as mislabeling shipments as charity goods or textile waste, splitting containers into smaller parcels, and routing goods through multiple transit countries to hide their origins. Indonesia’s vast number of small ports and unofficial sea routes also creates many entry points that are hard to monitor.

Once inside the country, distribution happens through highly informal networks—small warehouses, local traders, and thousands of online resellers—making it nearly impossible to track the flow of goods. The rapid growth of e-commerce and livestream selling adds another layer of complexity, with high-volume real-time transactions that regulators cannot monitor effectively, while sellers frequently change store names to avoid detection. Combined with limited inspection capacity at major ports and imperfect coordination between agencies, these conditions make enforcement far slower than the accelerating pace of illegal second-hand clothing imports.

E-Commerce Platforms to Clean Up

The rapid growth of online thrift sales has pushed e-commerce platforms to the center of the issue. The Ministry of SMEs summoned top platforms – Shopee, Tokopedia, TikTok Shop, and Lazada – to demand stronger enforcement against illegal clothing listings. This marks as one of the strongest government interventions toward digital marketplaces in recent years, urging platforms to comply with Trade Ministry Regulation No. 31/2023.

One area of particular concern is the rise of “live thrifting”. Sellers now livestream from warehouses, showcasing large quantities of imported goods and shipping them directly to consumers. Though marketed as small business activity, the volume and frequency suggest organized commercial operations hiding behind e-commerce’s open marketplace structure.

For platforms, allowing such activities creates compliance risks and increases scrutiny from regulators, especially as livestream commerce continues to expand.

To adapt, e-commerce companies have committed to comply with government regulations to invest in stronger product-verification systems and enforce stricter onboarding for sellers involved in apparel and textile categories. These actions are becoming necessary not only to avoid penalties but also to maintain trust and legitimacy in Indonesia’s fast-growing digital commerce environment.

For instance, Shopee has blocked over one million keywords, taken down hundreds of thousands of product listings, and impacted tens of thousands of non-compliant seller accounts, while also issuing direct notices and conducting manual reviews to ensure accuracy. Shopee emphasized that many sellers deliberately attempt to evade detection by altering keywords, making enforcement increasingly challenging.

Government Strengthens Ban on Used Clothing Imports

Not only e-commerce, but the government has also reaffirmed its strict ban on importing used goods to the public, including sellers. As regulated under Ministry of Trade No. 40/2022 and reinforced by the Trade Law and Consumer Protection Law, importers who continue bringing in used clothing may face up to 5 years in prison and fines of up to IDR 5 billion, in addition to administrative sanctions. Traders selling such goods can also face penalties of up to 5 years in prison and fines of up to IDR 2 billion.

Minister of MSMEs, Maman Abdurrahman, emphasized that the government will crack down on illegal-used clothing importers, not the thrift sellers themselves. To support thrift sellers affected by the ban, the government is preparing local product alternatives. To support this transition, the Ministry clarified that the 1,300 replacement brands consist primarily of local MSMEs and domestic manufacturers, complemented by several larger national apparel producers to ensure consistent supply. These brands have been curated through collaborations with SMESCO, regional cooperatives, and local industry associations.

The government plans to distribute these products through a coordinated channel involving SMESCO’s national MSME hub, provincial MSME centers, and integrated online catalogues, allowing thrift sellers to restock legally with affordable local alternatives. This approach is intended not only to reduce reliance on imported used clothing but also to strengthen domestic textile production and create new economic opportunities for Indonesian small businesses.

Conclusion

Indonesia’s crackdown on illegal imported used clothes reflects a broader effort to protect national industry, strengthen regulatory oversight, and ensure fairness in the digital commerce ecosystem. The data reveals the true scale of the problem, thousands of tons of garments, billions of rupiah in illicit value, and significant harm to SMEs and local textile producers.

As the government tightens enforcement, e-commerce platforms must both comply and innovate, helping build a healthier, more sustainable, and more accountable marketplace for Indonesia’s future digital economy. This episode also demonstrates the growing expectation on digital platforms to support national policy objectives, especially in areas involving consumer protection, MSME resilience and fair competition.

Looking ahead, companies should anticipate tighter regulatory updates from government, specifically Ministry of SMEs and Ministry of Trade, along with more proactive inspections and deeper coordination with Customs to block illegal shipments at the border. Digital platforms will need to stay alert as these measures are expected to intensify through 2026.

Sources:

1. https://www.tempo.co/politik/pemerintah-akan-arahkan-pedagang-thrifting-jual-produk-dalam-negeri-2086419
2. https://en.antaranews.com/news/391721/addressing-the-dilemma-of-thrifting
3. https://en.tempo.co/read/2066423/indonesia-intensifies-crackdown-on-illegal-second-hand-clothing-imports
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