TikTok opposes Indonesia’s plan to ban social media transactions, wants level playing field
[JAKARTA] TikTok on Wednesday (Sep 13) voiced strong opposition to the Indonesian government’s proposal to ban goods transactions on social media.
In recent weeks, several government officials in South-east Asia’s largest economy have proposed that social media and e-commerce be separated, a move they claim will prevent companies such as TikTok from engaging in monopolistic practices that will hurt Indonesia’s small and local businesses.
Anggini Setiawan, the head of communications at TikTok Indonesia, called for fairer treatment for the Bytedance-owned company, arguing that it has contributed to the success of millions of local businesses over the years.
“Close to two million local businesses in Indonesia use TikTok to expand and prosper through social commerce,” she said in response to queries by The Business Times.
“Forcing social media and e-commerce to separate into different platforms would not only hamper innovation, it would also disadvantage Indonesian merchants and consumers. We hope that the government of Indonesia will provide a level playing field for TikTok.”
On Monday, Indonesia’s Trade Minister Zulkifli Hasan told local media that the government intends to ban transactions involving the buying and selling of goods on social media, in line with the latest set of trade regulations.
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“They (TikTok) can’t have just one permission. They are social media, then it transforms into social commerce. It will kill others,” he said. The current trade regulations lack specific provisions addressing transactions conducted on social media platforms, said Hasan, adding that the revision of these regulations will “explicitly and decisively prohibit” such transactions.
A day later, Deputy Trade Minister Jerry Sambuaga said in parliament that “we must differentiate between e-commerce, social media and social commerce”.
Consumers in Indonesia have spent more on TikTok than any other country in South-east Asia over the past year, with the app’s e-commerce arm enjoying a large market share in the region and millions of sellers since its launch two years ago.
TikTok has previously said that it has 325 million active monthly users in South-east Asia, with more than a third – or about 125 million – hailing from Indonesia. In June this year, TikTok’s chief executive Chew Shou Zi visited Jakarta and announced billions of dollars in investment in South-east Asia in the coming years.
TikTok is expected to triple its e-commerce market share in the region to 13.2 per cent in 2023, from 4.4 per cent last year, said consultancy Momentum Works.
This will make it the fourth-largest e-commerce player in the region by gross merchandise value (GMV), behind Shopee (46.5 per cent currently), Lazada (17.7 per cent) and Tokopedia (13.9 per cent).
Momentum Works said this market share estimation is based on two factors – that TikTok reaches its GMV target of US$15 billion in South-east Asia this year, and that the other e-commerce players continue to see growth rates similar to what they achieved in 2021 and 2022.
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