E-Commerce and Marketplace in Indonesia: Requirements to Do the Business

The e-commerce and marketplace essentially conduct buying and selling products and services online or electronically. E-commerce is a retail online meanwhile marketplace is a platform between the seller and buyer to do transaction electronically. According to Indonesian regulatory, the e-commerce and marketplace are called as PPMSE (Trade Operators Through Electronic Systems).

From the regulatory framework, the scope of PPMSE are all parties who provide Electronic System Services and/or facilities to enable a transaction of electronic trading business activities to be carried out. The business practitioner provides its services by providing an application system to be used as an Electronic Communication to facilitate Trading business activities covering various business models, including to the e-commerce and marketplace.

There are key differences between e-commerce and marketplace in terms of business model which are elaborated below:

Key Items	E-Commerce	Marketplace
Business Model	Retail online in which the seller and buyers do the transaction directly without any intermediary	Digital platform as the intermediary between the sellers and buyers to conduct the transaction electronically or online.
Stock of the Product	Have products stock or they may hold the brand	Does not have stock or even the products or the brands. The stock of products and the brands belong to the owner of the trader
Example	Online shop, Zalora, Berrybenka, etc	Tokopedia, Shopee, etc
KBLI	Depending on the products	Depending on the business

REQUIREMENTS TO DO THE BUSINESS BASED ON INDONESIAN REGULATORY FRAMEWORK

In certain aspects, the business practitioner who provides e-commerce and marketplace need to meet the requirements as below:

1. minimum general requirements

• has a valid business license through Online Single Submission (OSS);
• technical license
• Tax ID
• business code of conduct
• standardization of goods/service products
• carry out the business in accordance with the laws and regulations in Indonesia, and reject the traders who do not meet the requirements as set out in the laws and regulations in Indonesia

1. data protection. Store data and information on electronic activities, including data and information related to customers, offers, confirmations (including payment confirmations), delivery status, complaints and disputes, electronic contracts, and types of goods/services traded. Such data and information must be stored for a minimum period of 10 years (for data and information related to financial transactions) or at least 5 years (for data and information not related to financial transactions).

1. consumer protection. The business practitioners are required to provide complaint services for consumers, which at least include the following:

• Address and contact number that can be used to submit complaints;
• Procedures that can be taken by consumers to submit complaints;
• Complaint follow-up mechanism;
• Provision of competent officers in processing complaint services; and
• Complaint settlement period.

1. Business practitioners of e-commerce or marketplace that domiciled abroad (outside of Indonesia) and meet minimum requirements shall appoint a representative in Indonesia and therefore establish a representative office in Indonesia. For more explanation, please click link below.

Disclaimer:

This article is for informational purpose only and does not constitute any legal advice. If you have any questions on setting up the business or get regulatory advice from us, please submit your inquiry below.