Indonesia considers new regulations for social media commerce amid market concerns

President Joko Widodo of Indonesia announced that the country is considering introducing new regulations governing the use of social media for selling products. The aim is to address the challenges posed by e-commerce sellers employing aggressive pricing strategies on platforms like TikTok, which officials have identified as a particular concern.

The president emphasized the need for technology to stimulate economic growth rather than harm traditional markets. However, he did not provide specifics about the forthcoming regulations, as the trade ministry is developing them.

One government official previously wanted to separate social media and commerce, pointing to TikTok’s live selling features. TikTok responded by highlighting the importance of social commerce for local sellers and creators, urging the regulations to consider their livelihoods.

Why does it matter?

TikTok boasts a substantial user base in Southeast Asia, particularly in Indonesia, where it has 125 million active monthly users out of 325 million across the region. Therefore, while promoting economic growth and safeguarding traditional markets is essential, new regulations present a complex challenge: finding the right balance between encouraging innovation and attracting foreign investments in the tech sector, a critical driver of economic potential.