Zulkifli explained that the new regulation broadly encompasses all electronic commerce within the country. For instance, Article 5, paragraph 4 of the regulation stipulates that foreign sellers trading in the domestic online markets must display information about their compliance with these standards on their online stores.

"This supports the empowerment of micro, small, and medium-sized enterprises (MSMEs) and domestic electronic business actors, as well as enhances consumer protection," said Zulkifli on September 27, 2023.

Zulkifli cited several standards that foreign traders must meet, including Indonesian National Standards (SNI), Halal Certification, and Marketing Authorization Numbers.

Additionally, Zulkifli acknowledged facing similar difficulties in facilitating the export of local fruits to some countries. He mentioned that exporting mangoes to Japan and salak fruit to China remains challenging. 

This is because both East Asian countries impose extensive and challenging requirements. Therefore, according to him, the tightening of trade regulations in the domestic market is something that applies similarly in several countries.

Possible sanction for foreign market players

Furthermore, Article 53 of Regulation No. 31 of 2023 regulates the imposition of administrative sanctions on foreign traders in local online markets who do not meet the required standards. The government will issue written warnings to foreign traders if they are found to be in violation.

These written warnings will be issued three times within a 14-calendar-day period from the discovery of the violation. If the warnings are not heeded, foreign traders will be blacklisted by the government or blocked from the local online markets.

However, the regulation does not specify the consequences for foreign traders if they are included in the government's blacklist. Currently, the most severe administrative sanction under this regulation is the revocation of business permits.

In summary, Zulkifli explained that the government introduced three revisions in Regulation No. 31 of 2023. First, it outlines the business model for social commerce. Zulkifli stated that social commerce will only facilitate the promotion of goods or services and is prohibited from providing payment transaction features.

Regulation No. 31 of 2023 defines social commerce as a social media provider that offers specific features, menus, and/or facilities. This business model allows sellers to display their products and/or services.

Second, the regulation ensures there is no connection between electronic systems for electronic commerce and those outside electronic commerce. Simply put, applications or electronic systems for local online markets and social commerce must be separate.

Third, it safeguards user data on social media and prohibits its use for electronic commerce or its affiliated companies. This means that user data on social media or social commerce platforms cannot be used by local online markets.