The Indonesian ministry of trade is implementing new regulations to further regulate e-commerce and prevent transactions on social media platforms. This means that users in Indonesia will no longer be able to buy or sell products and services on platforms like TikTok and Facebook. The government also aims to separate the connection between social media and e-commerce to prevent the misuse of public data for business purposes. Additionally, Indonesia will regulate the sale of overseas goods, treating them the same as offline domestic goods to address the influx of foreign products through social media platforms.
These regulations will have a significant impact on TikTok’s e-commerce ambitions in Indonesia, as the country is TikTok’s second-largest market with 113 million users. TikTok’s CEO had previously announced plans to invest billions of dollars in Indonesia and Southeast Asia. However, a TikTok spokesperson expressed concern about the livelihoods of millions of sellers and affiliate creators who use TikTok Shop and hoped that the regulations would consider their impact. Competitor Shopee, the e-commerce arm of Sea Limited, is expected to benefit from these regulations. Global investment bank Citi sees this as a positive development for traditional e-commerce players in Indonesia, predicting that any disruptions experienced by TikTok sellers during the transition will likely benefit Shopee and other e-commerce platforms in the coming months.
Overall, the new regulations aim to regulate e-commerce more effectively in Indonesia and prevent transactions on social media platforms. This move will impact TikTok’s e-commerce plans in the country and may provide opportunities for other e-commerce players like Shopee.
