Indonesia bans e-commerce transactions on social media
Indonesia has banned e-commerce transactions on social media platforms, the trade minister said ona blow to short video app TikTok, which is doubling down on Southeast Asia’s biggest economy to boost its e-commerce business.
Small and medium-sized businesses are being threatened by predatory pricing on social media platforms, according to the government. The move is effective immediately.
Earlier this year, TikTok pledged to invest billions of dollars in Southeast Asia, mainly in Indonesia, over the next few years in a major push to build its e-commerce platform TikTok Shop.
With 125 million active monthly users in Indonesia, TikTok, owned by China’s ByteDance, is looking to convert its large user base into a revenue stream for e-commerce.
The TikTok Indonesia spokesperson said it would pursue a constructive path forward and was “deeply concerned” about the announcement, particularly how it would affect the livelihoods of the 6 million local sellers.
Zulkifli Hasan, Indonesia’s trade minister, told reporters Wednesday that the regulation will ensure “fair and just” competition among businesses, as well as data privacy.
As a result, social media will become an e-commerce platform, a place to shop and a place to bank at the same time, he warned.
As part of the new regulation, Reuters reviewed a document requiring e-commerce platforms in Indonesia to set a minimum price of $100 for certain items that are directly imported from abroad, and that all products offered should meet local standards.