The 2024 E-Commerce Statistics data from Statistics Indonesia (BPS) revealed that of the total 4.4 million businesses operating on e-commerce platforms, 97.38 percent are micro and small enterprises.
This figure reflected a significant growth of 15.3 percent from the previous year, highlighting the role of small businesses as the backbone of Indonesia's digital economy.
To reshape the digital commerce ecosystem, the Indonesian government issued a series of new regulations throughout the first half of 2026. The goal is to safeguard broader market mechanisms while specifically protecting the livelihoods of local businesses.
At the core of these measures is Minister of Trade Regulation No.19 of 2026 on the Implementation of Trading Through Electronic Systems. Signed by Trade Minister Budi Santoso in early June and taking effect on June 8, 2026, the regulation replaces the previous ministerial regulation and expands protection across three key pillars: products and sellers, digital platforms, and consumers.
Complementing this is Minister of Micro, Small, and Medium Enterprises (MSMEs) Regulation No. 3 of 2026, which specifically governs partnerships between platforms and micro and small enterprises. Most notably, it mandates full transparency regarding all fee components within partnership agreements.
These two regulations operate at different tiers yet reinforce one another: one regulates the ecosystem at the macro level, while the other protects business relationships at the micro level where MSMEs conduct their daily operations.
Kurnia Ramadhana, Deputy for Partnerships and Media Relations at the Indonesian Government Communications Agency (Bakom), noted that the Business Identification Number (NIB) requirement for online merchants is intended to strengthen compliance with existing rules.
The urgency of this regulation stems from the structure of the e-commerce sector, which is heavily dominated by micro and small enterprises.
Data from the Online Single Submission (OSS) system as of late February 2026 reaffirmed this reality. Of the 15.4 million NIBs issued, more than 96 percent belong to micro-enterprises.
Minister of Trade Regulation No.19/2026 requires marketplace platforms to integrate features that directly link sellers to the OSS system. This ensures that legal registration is no longer a hurdle for small merchants who previously struggled to navigate the licensing process on their own.
By making business registration more accessible, the policy opens up access for MSMEs to obtain capacity-building programs and financing opportunities that require formal business status.
Cost transparency is another critical issue. One recurring structural complaint from MSME sellers is the lack of clarity regarding platform service fee components—a problem that escalated when one platform unilaterally raised various fee structures.
The ministerial regulation addresses this issue by requiring platforms to clearly and consistently disclose all fee components, from transaction and payment processing fees to promotional features like video content and affiliate marketing.
For small business owners, a transparent fee structure is essential for accurately calculating profit margins and setting competitive prices.
Prioritizing local products
One of the most concrete provisions in Minister of Trade Regulation No.19/2026 is the obligation for e-commerce platform operators to configure their product search, recommendation, and ranking systems to prioritize local products at the top of the main page. This mandate specifically favors goods produced or sold by micro and small enterprises.
As the government is not directly intervening in the algorithms or the use of technology by platforms, operators retain full discretion over their technical mechanisms.
Under this rule, when users search for "men's running shoes", the top results should feature Indonesian-made products from MSMEs, rather than the cheaper imported goods that have historically dominated marketplace landing pages.
The criteria for sellers to secure this visibility boost are simple: merchants need only possess an NIB confirming their MSME status and self-declare as a local product, without additional charge from the platform.
For those uncertain about the origin of their products, the government offers resources through the Indonesian Brand Community and a product traceability system, while specific inquiries can be directed to the Ministry of Trade.
There are also incentives in the form of discounts on promotion and advertising fees for local sellers, as well as broader marketing reach within marketplaces.
The implementation is overseen by the Ministry of Trade's Directorate General of Consumer Protection and Fair Trade, which is authorized to request clarification from platforms and investigate reports from the public or business owners regarding alleged non-compliance.
This regulation took effect immediately upon promulgation with no transition period, as platform operators were actively involved throughout its drafting process.
This combination of local product prioritization, promotional incentives, and oversight mechanisms ensures that support for MSMEs is embedded directly into the interfaces seen daily by millions of online shoppers.
Responses from the business community have also reflected the positive direction of this regulation.
The Indonesian Retailers Association (Aprindo) expressed its consistent support for the revision of the E-Commerce trade regulation throughout its drafting process, hoping that the new rules will ease logistical costs that have long burdened domestic businesses while curtailing the influx of illegal imports disrupting local competitiveness.
Minister of Trade Regulation No.19/2026 also addresses emerging challenges by regulating the responsible use of artificial intelligence (AI) in online promotional activities.
This provision complements the requirement for platforms to maintain customer dispute mechanisms as a first line of resolution, ensuring digital transaction issues can be handled swiftly and proportionally without escalating into time-consuming and costly formal disputes.
This series of policies has reaffirmed the government's greater support for MSMEs, in addition to several other initiatives, such as the disbursement of Rp295 trillion (approximately US$16.3 billion) in subsidized low-interest credits through the People's Business Credit (KUR) program. Bank Indonesia (BI) has also targeted 47 million merchants to use Quick Response Code Indonesian Standard (QRIS) as a payment method.
These regulations, financing facilitation, and payment infrastructure are moving in unison toward a single goal: ensuring MSMEs not only survive in the digital space, but also gain the solid foundation needed to scale up and hold their own against imported products.
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Editor: Primayanti
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