Letters | Asean must keep markets open to allow digital economy to thrive

Readers discuss the need to strike a balance between business interests and regulatory oversight, and the escalating trade war

Reading Time:3 minutes

A woman holds a dress as she live-streams on an e-commerce platform at a shop in Depok, Indonesia, on September 28, 2023. The Indonesian government announced a regulation that bans social media sites such as TikTok and Instagram from selling goods and services directly. Photo: EPA-EFE

Published: 11:30am, 20 Mar 2025

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The Association of Southeast Asian Nations’ (Asean) digital economy is one of the region’s biggest success stories. Investment, competition and cross-border trade have turned e-commerce into a powerful engine of growth, creating opportunities for over 20 million micro-, small- and medium-sized enterprises and reshaping how businesses operate. This progress was not inevitable – it was made possible by a deliberate decision to keep markets open and let competition drive innovation. That decision is now being tested.

Governments across the region have introduced foreign ownership limits, data localisation mandates and new tax structures, framing them as necessary to protect domestic interests. If extended to e-commerce, these measures could reshape the industry’s competitive landscape.

A strong economy is built by fostering a competitive environment where businesses can grow. Cross-border trade and foreign capital have played an indispensable role in fuelling Asean’s e-commerce growth, significantly shaping the region’s digital economy. Fragmenting this system with restrictions risks making Asean less competitive, not more resilient.

In places where market-limiting measures have taken hold, e-commerce costs have climbed, making goods less affordable and narrowing consumer choices. Instead of strengthening the economy, these restrictions put pressure on spending and limit growth. The disruption of cross-border e-commerce flows because of compliance barriers could result in a substantial economic opportunity cost for Asean sellers.

Governments have a responsibility to regulate in ways that promote stability and sustainable growth. In the digital economy, this means ensuring that policies support innovation, maintain fair competition and create a predictable environment for businesses to invest and expand.

E-commerce platforms, logistics providers and payment systems depend on regulatory clarity to plan long-term investments. Policy shifts, especially when introduced without sufficient clarity or transition periods, can create ripple effects across supply chains, add to operational costs and make investment decisions more complex.