Free shipping restricted by government: Protecting small Businesses or a new challenge for e-commerce?
Free shipping promos have become a huge hit with consumers and a major weapon for big e-commerce platforms to attract buyers. But now, the government has limited this feature to just 3 days per month, as stated in the Ministry of Communication and Digital Regulation (Permen Komdigi) No. 8 of 2025.
Why has this become a national issue? Let’s take a deeper look.
1. Unfair competition
“Free” shipping isn’t really free—it’s usually subsidized by the big e-commerce players. Backed by foreign investors, they can afford to offer zero shipping fees, even for deliveries across islands. But this makes it impossible for small businesses—especially local MSMEs (UMKM) selling independently or on smaller marketplaces—to compete. The government sees this as an unhealthy market practice.
2. Foreign platform dominance
Most shipping subsidies come from large, foreign-based platforms. If they continue to dominate, Indonesia’s e-commerce market could end up being fully dependent on them. This restriction is a first step in protecting the sovereignty of the national digital economy.
3. Local MSMEs at risk
MSMEs that can’t afford to offer free shipping risk losing customers. Without intervention, this can increase inequality and discourage small businesses from growing in the digital space.
4. Price manipulation & dumping strategies
Free shipping is often paired with artificially inflated product prices to cover the shipping cost—or worse, with dumping: selling products below production cost. This messes up price structures in the market and hurts healthy business growth.
5. Hard-to-monitor taxes & regulations
With all these promos and hidden discounts, it gets tough for the government to monitor taxes and get accurate financial reports from digital transactions. This affects state revenue and oversight of fair business practices.
Conclusion: Toward a more balanced digital ecosystem
This free shipping restriction isn’t meant to suppress e-commerce, but to create more fairness and balance in the digital landscape. MSMEs should be able to grow sustainably, and consumers still get decent services—not just flashy deals.
Big promos are still allowed—but within limits that support fair competition. As digital players, maybe it’s time we rethink how we compete—more sustainably, and with more support for the local economy.
Let’s not forget, the government also has homework: reducing Indonesia’s notoriously high logistics costs.
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