Tokopedia CEO William Tanuwijaya, Bukalapak CEO Rachmat Kaimuddin, and Shopee Indonesia executive director Christin Djuarto attended a hearing on Wednesday with members of the People’s Representative Council from Commission 6, whose scope of duties covers trade, industry, investment, as well as micro, small, and medium enterprises (MSMEs). The tech execs presented their views on the “increasing local trade in the e-commerce sector.” Gojek CEO Kevin Aluwi also attended the meeting remotely.

It was the first time for Indonesia’s parliament to invite the leaders of local tech giants to attend a hearing. Each tech executive presented their company’s programs, strategies, and plans to support MSMEs and local products on their respective platform.

GoTo merger and IPO plan

Speaking before members of parliament, Tokopedia CEO William Tanuwijaya said that the merger between Tokopedia and Gojek was not a consolidation aimed at creating a monopoly.

“Gojek and Tokopedia are two local companies that compete with global companies. Our merger was not driven by investors’ interests,” said Tanuwijaya. “Gojek and Tokopedia have different business lines. I have known Andre [Soelistyo] and Kevin [Aluwi] for a long time, and we share the same vision to build a legacy for Indonesia on the global stage.”

Tanuwijaya added that Tokopedia and Gojek’s respective international competitors have much more working capital than either company. Therefore, combining their strength to form GoTo can be a way to fend off major players. “However, this merger doesn’t eliminate options for consumers. We didn’t lay off our employees. Instead, we’ll be able to absorb more manpower,” he said.

The parliament also encouraged major e-commerce and tech companies to follow Bukalapak’s move to go public in Indonesia. Both Tanuwijaya and Gojek’s Aluwi said that GoTo will list its shares on the Indonesia Stock Exchange. However, they did not share a timeline for GoTo’s IPO.

Local products and MSMEs on e-commerce platforms

On the matter of local products, Shopee Indonesia executive director Christin Djuarto said there are cross-border sales by foreign sellers on Shopee’s platform, but local sellers far outnumber them. “At the beginning of the year, the percentage of foreign sellers was less than 3%. It is even smaller today,” she said. The company also prohibits foreign vendors from selling a number of products, such as traditional clothing likebatik and kebaya, Muslim fashion items, as well as wooden and household crafts. “Local MSMEs don’t need to worry because we have removed foreign sellers who sell these products,” Djuarto continued. There are currently more than 5 million active MSMEs on Shopee’s platform.

Djuarto also said that Shopee Indonesia supports local MSMEs to export their products to several countries where Shopee operates, including Malaysia, Singapore, the Philippines, Vietnam, Thailand, and Brazil. “In February 2021, 1.5 million products were sold through Shopee’s export program,” Djuarto added.

Meanwhile, Bukalapak CEO Rachmat Kaimuddin presented a number of existing initiatives to encourage micro and small retailers, including its offline-to-online business, Mitra Bukalapak, which equips micro-retailers with digitized tools for their business operations. Mitra Bukalapak was the main contributor to the company’s revenues in the first half of 2021.

Data protection

Members of parliament brought up data security issues, which are of major concern in Indonesia following multiple high-profile data breaches involving government and private servers. Tokopedia’s Tanuwijaya said that data breaches and illegal data sales by certain companies or groups are two separate matters. “In the digital world, cyberattacks happen every day, even to institutions like the Pentagon. And in the past two years, many companies, including global platforms, have fallen victim to data breaches,” he said.

Regarding Tokopedia’s data leak that compromised up to 91 million user accounts last year, Tanuwijaya said the company has followed all the best practices, including providing a transparent explanation to the public regarding the leak and making improvements to the platform’s cybersecurity system.

“However, [data breach] incidents will continue to happen in the future, so it is very important for parliament to make clear and firm regulations to prevent criminals from doing this again,” said Tanuwijaya.

Check this out: Data Leaks Hit Indonesia’s Tech Ecosystem