On Tuesday, Indonesian sellers on Lazada have been relieved of fees, according to James Chang, the platform's CEO in Indonesia. This was articulated in a memo sent to personnel shortly following a town hall gathering, as seen by CNBC. Chang procured this information, commenting that recent regulatory modifications have resulted in a healthier, advantageous competitive setting for the industry's long-term growth. Lazada, owned by Chinese tech goliath Alibaba Group since 2016, is part of their International Digital Commerce Group, which comprises of AliExpress, Trendyol and Daraz.
Lazada, the Southeast Asian e-commerce marketplace owned by Alibaba, is attempting to attract sellers affected by Indonesia's fresh e-commerce legislation, its Indonesia CEO James Chang announced to staff during a town hall meeting on Friday. According to a document distributed to staff following the town hall meeting, observed by CNBC, Chang stated that the firm has eliminated fees for all Indonesian sellers doing livestream sales on Lazada. "For micro-, small and medium-sized enterprises affected by the recent regulatory changes, we are backing them by welcoming them to Lazada," he added.Recently, Indonesia has stepped up its efforts to control social media sites that supply e-commerce, such as TikTok, in an effort to shield domestic companies. President Joko Widodo said recently that an escalation of foreign imports, provided by these sites, resulted in a fall in sales for domestic enterprises. Indonesia imposed a ban on social media deals and set a one-week deadline last week for TikTok to become a separate app, with no e-commerce aspect, or face closure.In reaction, TikTok Indonesia declared Tuesday that it would comply with local laws and end facilitating e-commerce purchases.At the town hall meeting for Indonesian staff, Chang said the recent regulatory changes have created "a more positive, healthy competitive landscape for our industry's long-term development." He then added that freshly registered sellers will appreciate zero seller commission for 3 months, zero free shipping fee for 2 months and 300,000 Indonesian rupiah ($19.19) worth of seller solutions credit.
TikTok is poised to become an ever-increasing challenge to e-commerce providers like Lazada and Shopee owned by Sea Limited in Indonesia and other nearby places. According to a tech firm Momentum Works, TikTok had hit a GMV of $2.5 billion in Indonesia by 2022. DBS Bank's Sachin Mittal highlighted the benefit that TikTok enjoys from impulsive buying due to its content-driven material. Momentum Works' stats showed that Lazada is the third-largest e-commerce player in Indonesia with a market share of 10%, lagging behind Shopee (36%) and GoTo's Tokopedia (35%). Momentum Works also reported Indonesia as the main e-commerce market in Southeast Asia last year with a GMV of 52%. The Indonesian government has recently instituted a minimum price of $100 for items bought internationally through e-commerce channels in the country and all products must comply with local standards.
Citi stated in a Wednesday report that while the immediate closure is beneficial to other e-commerce companies in Indonesia, for instance Tokopedia, Shopee, Lazada and others, the amended regulation will ultimately control the supremacy of foreign e-commerce and their items. The Citi researchers added that in the long-term, the government will declare policies that will maintain the local leader, which is similar to the tactics being made in China, the U.S. and India. A representative of Lazada elucidated to CNBC that "local businesses and vendors make up most" of the e-commerce platform, providing their products to Indonesian buyers.
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