Indonesia Bans E-commerce Sales on TikTok
Are You Hiring?
Find candidates in 72 Hours with 5+ million talents in Maukerja Malaysia & Ricebowl using Instant Job Ads.
Hire Now
In a recent turn of events, the Indonesian government made a decisive move by banning e-commerce transactions on social media platforms, leaving millions of sellers on TikTok Shop deeply affected. This decision was fueled by the aim to shield local businesses from the fierce competition posed by e-commerce giants, which were often accused of engaging in predatory pricing practices.
Understanding the Ban
The ban, announced by Trade Minister Zulkifli Hasan after discussions with President Joko Widodo, was primarily enacted to prevent algorithmic domination and protect personal data from being misused for business interests. While the move intends to create a level playing field for local businesses, its impact has been swift and significant.
TikTok's Response
TikTok Indonesia responded regretfully, expressing concerns about how the ban would jeopardize the livelihoods of approximately six million sellers and nearly seven million affiliate creators who rely on TikTok Shop. Despite this, TikTok pledged to respect the regulations and laws of Indonesia, vowing to take a constructive approach amidst this challenging situation.
Predatory Pricing and Its Impact
Minister of Cooperatives and Small and Medium Enterprises Teten Masduki shed light on the adverse effects on local businesses. During his visit to Southeast Asia's largest wholesale market, Tanah Abang in Jakarta, Masduki noted that sellers were experiencing over 50% loss in profits. This drastic decline was attributed to the inability of local products to compete with imported items sold online at significantly lower prices.
Ensuring Fair Trade
Emphasizing that the regulation applies to all social commerce platforms, not just TikTok Shop, Minister of Communication and Informatics Budi Arie clarified that the intention was to establish online and offline fair trade practices. The move aims to strike a balance where local businesses can thrive without being overshadowed by large-scale e-commerce entities.
In need of hiring employees? Our Instant Job Ad can help you!