Revisiting Indonesia’s E-Commerce Rulebook: Balancing Growth, Competition, and Consumer Protection

Background

Indonesia’s e-commerce industry has changed dramatically since the introduction of Trade Minister Regulation (Permendag) No. 31 of 2023. Originally designed to bring greater oversight to digital commerce and address concerns around social commerce, the regulation reshaped how online platforms operate and how merchants compete in the digital marketplace. At the time, the regulation was seen as a decisive intervention. It sought to create a more level playing field for local businesses, strengthen consumer protection, and address concerns over the growing influence of social commerce platforms. The regulation also reflected a broader ambition: ensuring that Indonesia’s digital economy could continue growing without leaving local merchants behind.

Now, in 2026, policymakers are taking another look at the regulations. The decision to revise Trade Minister Regulation No. 31 of 2023 signals an important reality. While the regulation addressed many of the challenges facing the industry in 2023, the e-commerce landscape has evolved rapidly, bringing new concerns that require a different policy response.

What the Trade Minister Regulation No. 31/2023 Set Out to Achieve

When the regulation was introduced, Indonesia’s digital commerce sector was experiencing explosive growth. Millions of consumers were shopping online, while social media platforms were increasingly becoming channels for commercial transactions. The Trade Minister Regulation No. 31/2023 was designed to establish clearer rules for this evolving environment. Among its most notable features were provisions governing social commerce activities, marketplace responsibilities, and the promotion of fair competition within the digital economy.

In many ways, the regulation represented Indonesia’s first comprehensive attempt to modernize its digital commerce framework for a rapidly changing market.

Three Years Later, New Challenges Have Emerged

The e-commerce industry of 2026 looks very different from the one policymakers were responding to in 2023. While debates over social commerce once dominated public attention, marketplace governance has now become the central issue. Today’s discussions focus on questions such as how products are promoted, how fees are structured, and whether marketplace ecosystems are creating sustainable opportunities for merchants.

These concerns have prompted policymakers to revisit the existing framework. Rather than replacing the original objectives of Permendag No. 31/2023, the revision seeks to strengthen and expand them. The focus is shifting from regulating specific business models to ensuring the long-term health of the entire digital commerce ecosytem.

One reason the government is revisiting Permendag No. 31/2023 is the growing scale of enforcement required to oversee Indonesia’s rapidly expanding digital marketpalce. Since the regulation came into force, authorities have moved beyond establishing rules and have increasingly focused on monitoring compliance across the e-commerce ecosystem. By March 2026, online supervision had been conducted on 104 electronic commerce business operators, consisting of 6 marketplaces, 92 online retailers, and 16 classified advertising and price comparison platforms. The findings have resulted in substantial enforcement actions. Between the first quarter of 2024 and the third quarter of 2025, authorities issued 3,310 sanction letters to online merchants and businesses operating through digital platforms. In addition, 107 online stores were either temporarily or permanently blocked, including 52 stores during the fourth quarter of 2024, 7 stores in the first quarter of 2025, and another 48 stores in the second quarter of 2025. Enforcement has continued into 2026, with 37 first warning letters issued to PMSE businesses that had yet to comply with regulatory requirements.

These figures suggest that Indonesia’s e-commerce framework has evolved beyond a rulemaking exercise and into an active compliance regime. The scale of enforcement also highlights why regulators may see a need to strengthen existing provisions and improve marketplace oversight.

Marketplace fees move to the center of the debate

While Permendag No. 31/2023 initially focused on marketplace governance and digital trade, one of the biggest issues driving the current revision is the growing concern over seller economics.

Over the past year, MSMEs have increasingly complained about the costs of selling through digital platforms. According to industry discussions, marketplace-related fees that were once commonly perceived to be in the range of 2%–5%, or even 5%–10%, have in some cases risen to 20%–25% once various charges are considered.

For small businesses operating on thin margins, the difference is significant. As a result, discussions surrounding marketplace fees have become a major policy issue, prompting the government to develop a separate regulatory initiative focused specifically on MSME competitiveness and platform-related costs.

The emergence of this parallel policy track demonstrates how the conversation around e-commerce regulation has evolved since 2023. The focus is no longer limited to platform governance; it now includes the broader economics of participating in Indonesia’s digital marketplace.

Not a regulatory overlap, but a complementary approach

One of the more interesting aspects of the ongoing revision is that it is taking place alongside a separate initiative led by the Ministry of MSMEs. At first glance, the two efforts appear to address similar issues within the digital economy. In reality, they are tackling different parts of the same challenge.

The Ministry of Trade, which oversees Indonesia’s e-commerce framework through Permendag No. 31/2023, is focusing on marketplace governance. The revision is expected to strengthen protection for local products, improve consumer safeguards, increase marketplace transparency, and reinforce the responsibilities of digital platforms operating in Indonesia.

At the same time, the Ministry of MSMEs is developing a separate regulatory framework aimed at addressing concerns raised by small businesses selling through online marketplaces. Over the past year, MSMEs have increasingly voiced concerns about rising operational costs, including platform commissions, administrative charges, advertising fees, and logistics expenses. These concerns have become significant enough to warrant a dedicated policy response focused specifically on the competitiveness of small businesses in the digital economy.

The distinction is important. While the Ministry of Trade is looking at how marketplaces operate, the Ministry of MSMEs is focused on the business conditions faced by the merchants that rely on those platforms. In other words, one policy seeks to improve the rules of the marketplace, while the other seeks to improve the economics of participating in it.

If implemented effectively, the two regulatory tracks could complement each other. The revised Permendag No. 31/2023 would provide stronger governance and oversight for digital marketplaces, while the MSME-focused regulation could help address concerns around seller profitability and competitiveness. Together, they would create a more comprehensive framework for supporting Indonesia’s rapidly growing digital economy.

What could change under the revised regulation?

While the final text has not yet been released (as per June 5^th, 2026), discussions surrounding the revision suggest several areas of focus:

1. Stronger oversight of marketplace operators and online sellers
   • More active monitoring of PMSE businesses.
   • Clearer compliance requirements for platforms and merchants.
   • Expanded enforcement mechanisms for non-compliant businesses.
2. Greater transparency within marketplaces
   • Better disclosure of seller information and product origin.
   • Increased visibility for locally produced goods.
   • Improved transparency in platform policies and marketplace operations.
3. Enhanced protection for domestic businesses
   • Measures aimed at strengthening the position of local products.
   • Continued efforts to create fair competition between domestic and imported goods.
   • Additional safeguards for Indonesian MSMEs operating online.
4. Improved consumer protection
   • Stronger accountability for products sold through marketplaces.
   • More robust supervision of online transactions.
   • Better mechanisms for handling complaints and disputes.
5. A more enforceable regulatory framework
   • Increased use of monitoring and compliance tools.
   • More systematic supervision of PMSE businesses.
   • Stronger penalties for repeated violations.

Looking ahead

While the revised Permendag No. 31/2023 has yet to be officially released, recent developments suggest that its publication may not be far off. As policymakers finalize the revision and related inter-ministerial discussions continue, businesses across the e-commerce ecosystem are closely monitoring what comes next.

The anticipated revision reflects the changing priorities of Indonesia’s digital economy. While the original regulation was largely focused on addressing the rise of social commerce and establishing clearer rules for online marketplaces, the conversation has since expanded to include broader issues such as marketplace transparency, local product competitiveness, merchant sustainability, and regulatory enforcement.

As Indonesia’s e-commerce sector continues to mature, the revised framework is expected to play an important role in shaping how platforms, merchants, and consumers interact in the years ahead. The challenge will be ensuring that the new rules support innovation and growth while maintaining a fair and sustainable digital marketplace for all stakeholders.

Source:

1. https://industri.kontan.co.id/news/kemendag-perketat-pengawasan-e-commerce-104-pelaku-usaha-diawasi-hingga-maret-2026
2. https://www.cnnindonesia.com/ekonomi/20260526175020-92-1362642/mendag-ungkap-5-poin-utama-dalam-revisi-aturan-e-commerce
3. https://jakartaglobe.id/business/indonesia-plans-ecommerce-rule-revision-after-sme-complaints-over-fees
4. https://en.antaranews.com/news/416924/indonesia-set-to-finalise-e-commerce-rule-revision
5. https://ekonomi.bisnis.com/read/20260604/12/1978548/mendag-teken-revisi-aturan-e-commerce-ini-poin-poin-pentingnya
6. https://www.idnfinancials.com/id/news/63688/biaya-administrasi-tinggi-indonesia-revisi-aturan-e-commerce