Two sellers providing merchandise on the market by way of a TikTookay livestream.
Bay Ismoyo | Afp | Getty Images
Indonesia’s ministry of commerce mentioned Tuesday it’s working to additional regulate e-commerce, including that the nation doesn’t permit transactions on social media 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 mentioned in an official launch.
This implies that customers in Indonesia can’t purchase or promote services and products on TikTookay and Facebook.
The authorities mentioned it is going to additionally bar social media firms from doubling as e-commerce platforms to forestall misuse of public information.
In a media convention Monday, Minister of Trade Zulkifli Hasan mentioned that “the connection [between social media and e-commerce] must be separated so that the algorithm is not all controlled” and this “prevents the use of personal data” for enterprise functions.
Indonesia additionally mentioned it will additionally regulate which abroad items could be bought, including these merchandise would obtain the identical remedy as offline home items. The transfer comes as overseas items grow to be more and more accessible in Indonesia by way of social media platforms.
On Saturday, Indonesia’s President Joko Widodo known as for social media laws, citing the platforms’ impacts on native companies and the economic system.
“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 mentioned a press release.
A blow to TikTookay
Indonesia’s laws are set to devastate TikTookay’s e-commerce ambitions within the nation.
Indonesia is TikTookay’s second-largest market with 113 million customers, simply behind the U.S. which has 116.5 million TikTookay customers, in keeping with DataReportal.
In June, TikTookay’s CEO Shou Zi Chew mentioned 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 TikTookay spokesperson mentioned after Indonesia’s transfer.
“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 mentioned.
Citi mentioned in a Tuesday report that the transfer advantages competitor Shopee, the e-commerce arm of Sea Limited, and Indonesia’s home 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 worldwide funding financial institution mentioned 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,” mentioned Citi.
Source: www.cnbc.com”