Two sellers using product for sale through a TikTo k livestream.
Bay Ismoyo|Afp|Getty Images
Indonesia’s ministry of trade stated Tuesday it is working to even more manage e-commerce, including that the nation does not permit deals on social networks platforms.
“One of the things that is regulated is that the government only allows social media to be used to facilitate promotions, not for transactions,” the ministry stated in a main release.
This suggests that users in Indonesia can not purchase or offer services and products on TikTo k and Facebook
The federal government stated it will likewise disallow social networks business from functioning as e-commerce platforms to avoid abuse of public information.
In a media conference Monday, Minister of Trade Zulkifli Hasan stated that “the connection [between social media and e-commerce] needs to be separated so that the algorithm is not all managed” and this “prevents the use of personal data” for company functions.
Indonesia likewise stated it would likewise manage which overseas items can be offered, including these items would get the exact same treatment as offline domestic items. The relocation comes as foreign items end up being progressively readily available in Indonesia through social networks platforms.
On Saturday, Indonesia’s President Joko Widodo required social networks policies, mentioning the platforms’ effect on regional services and the economy.
“Because we know it affects MSMEs, small businesses, micro-enterprises, and also the market. There are markets where sales have started to decline due to the influx,” he stated a declaration.
A BMI report on Tuesday stated that online markets represent a substantial part of Indonesia’s digital deals.
In July 2023, the worth of digital deals struck a perpetuity high of 160 trillion Indonesian rupiah ($103 billion), the report stated.
A blow to TikTo k
Indonesia’s policies are set to ravage TikTo k’s e-commerce aspirations in the nation.
Indonesia is TikTo k’s second-largest market with 113 million users, simply behind the U.S. which has 116.5 million TikTo k users, according to DataReportal.
In June, TikTo k’s CEO Shou Zi Chew stated that the app is “going to invest billions of dollars in Indonesia and Southeast Asia over the next few years.”
“Social commerce was born to solve a real world problem for local traditional small sellers, by matching them with local creators who can help drive traffic to their online shops,” a TikTo k representative stated after Indonesia’s relocation.
“While we respect local laws and regulations, we hope that the regulations take into account its impact on the livelihoods of more than 6 million sellers and close to 7 million affiliate creators who use TikTok Shop,” they stated.
Citi stated in a Tuesday report that the relocation advantages rival Shopee, the e-commerce arm of Sea Limited, and Indonesia’s domestic gamers.
“We view this as a positive development for traditional e-commerce players in Indonesia — particularly Sea Ltd., given the latest competitive intensity between TikTok and Shopee,” the international financial investment bank stated in its report.
“Depending on the timing of the implementation and the transition process to the possible alternative app, in our view, any disruptions that TikTok sellers experience during the transition will likely be beneficial to Shopee and other traditional e-commerce platforms in the coming months,” stated Citi.
