TikTok dispatches team to address e-commerce ban in Indonesia

TikTok has dispatched a team from its global headquarters in Singapore to Indonesia for discussions with local authorities following Jakarta’s decision to prohibit e-commerce transactions on social media platforms. Indonesia’s action seems specifically targeted since TikTok is the sole social media company in the country that operates its own online store and payment service. The ban comes against the backdrop of TikTok intensifying its focus on Southeast Asia’s largest economy to enhance its e-commerce operations. TikTok expressed its concerns about the ban, emphasizing its potential repercussions on the incomes of the 6 million sellers and nearly 7 million affiliate creators who rely on TikTok Shop.

As TikTok is confronted with regulatory challenges in the United States and Europe, primarily related to national security concerns, Southeast Asia has become a crucial market for TikTok’s growth. However, if other countries adopt Indonesia’s approach of prohibiting social media companies from engaging in commerce, it could jeopardize the app’s commercial prospects. With the introduction of in-app shopping in mid-2021, TikTok has actively pursued facilitating sales on its platform. Indonesia, with a population of 273 million, represents a crucial market for the Chinese app.

The government stated that their primary objective behind this immediate action is to safeguard offline merchants and marketplaces, as the practice of predatory pricing on social media platforms poses a significant threat to small and medium-sized enterprises.