Indonesia’s policy on e-commerce regulation and its challenges

Abstract

Globalization has a significant influence on many aspects, such as social and economic, and its effect cannot be separated from technological developments that change human behavior in conducting economic activities. Those change including the emergence of trade that uses online-based transactions or ecommerce. E-commerce considered to have a significant influence on the country’s economic growth and predicted to flourish over the years. Aware of its enormous potential and growth in Southeast Asia, countries in this region began to regulate e-commerce, and one of them is Indonesia. The authors find that in the past few years, Indonesia has been more active in making and changing its policies to regulate online-based trading, while at the same time trying to protect its domestic small-medium enterprises (SMEs). Nowadays, Indonesia's ecommerce market is relatively minor compared to its neighbors. However, believed that the growth of the middle class, the improvement of internet users, and the intensive improvements in Indonesia’s logistics and infrastructure that conducted in recent years, will have a significant effect on the Indonesian ecommerce market. In this paper, the authors will explain the policy of Indonesia in regulating e-commerce and its challenges. The discussion in this paper will be divided into three sections. The first part is the conceptual foundation. The second part is about the development of e-commerce in Indonesia. The third part is the Indonesian government's policy in managing e-commerce and its challenges