TikTok expressed disappointment over Indonesia’s recent decision to prohibit e-commerce transactions on social media, highlighting its potential impact on the numerous merchants using TikTok Shop.
But TikTok Indonesia said in a statement it will respect the regulations and laws that apply in Indonesia and “will take a constructive path forward.”
“We deeply regret the government’s announcement, especially how it will impact the livelihoods of the six million sellers and nearly seven million affiliate creators who use TikTok Shop,” said the statement sent to The Associated Press on Thursday.
The Indonesian government initiated this ban to shield local small enterprises from e-commerce rivals, accusing platforms like TikTok of undercutting prices.
Following a meeting with President Joko Widodo, Trade Minister Zulkifli Hasan unveiled this decision, emphasizing its goal to counter algorithmic dominance and prevent the misuse of user data for business gains.
Effective immediately, the ban intends to foster an equitable e-commerce environment. It restricts online platforms from conducting and processing payments but allows them to advertise goods and services.
Last week, during a visit to Jakarta’s largest wholesale market, Tanah Abang, another minister, Teten Masduki, observed that local sellers suffered significant profit losses, unable to match the lower prices of imported online goods.
Masduki accused TikTok of engaging in “predatory pricing”, harming local businesses. This regulatory move aims to ensure fair online and offline trading practices.
Notably, this decision follows TikTok CEO Shou Zi Chew’s commitment, made in Jakarta, to invest billions in Indonesia and Southeast Asia, focusing on training, advertising, and aiding small vendors on TikTok Shop.
