JAKARTA, Indonesia: In response to the Indonesian government’s recent decision to ban e-commerce transactions on social media platforms, TikTok, a Chinese-owned app on Thursday, expressed regret for the potential impact on its millions of sellers who utilize TikTok Shop.
The move aims to protect small businesses from perceived predatory pricing and foster fair trade practices.
TikTok Indonesia conveyed its respect for Indonesian regulations and laws, committing to navigate the situation constructively. In an official statement, the company expressed deep regret for the government’s decision, particularly its potential adverse effects on the livelihoods of approximately six million sellers and nearly seven million affiliate creators associated with TikTok Shop.
Indonesia’s Trade Minister, Zulkifli Hasan, announced the ban following discussions with President Joko Widodo, emphasizing its purpose to prevent algorithmic domination and protect personal data from being utilized for business interests. The government’s concern about the unfair competition posed by e-commerce platforms led to this regulatory action.
During a visit to Tanah Abang, Southeast Asia’s largest wholesale market in Jakarta, Minister of Cooperatives and Small and Medium Enterprises, Teten Masduki, observed that local sellers were suffering substantial profit losses, exceeding 50% due to an inability to compete with lower-priced imported products available online.
Masduki attributed this situation to what he described as “predatory pricing” by the China-based platform, TikTok, emphasizing the damage inflicted upon local small- and medium-sized businesses. The government views the new regulation as a means to justly regulate fair trade both online and offline, ensuring a level playing field for all businesses.
Minister of Communication and Informatics, Budi Arie, clarified that the regulation is intended to encompass all social commerce platforms and not just TikTok Shop. The Indonesian government seeks to establish a fair and equitable trading environment that benefits local enterprises and consumers alike.
