Shulou(Shulou.com)11/24 Report--

On September 28, Indonesia's Ministry of Trade said on Tuesday that it was working to regulate the e-commerce market, adding that trading on social media platforms was prohibited.

"We stipulate that promotions can only be carried out on social media, but no transactions can be made," Indonesia's trade ministry said. "

This means that Indonesian users cannot buy or sell products and services on social media platforms such as TikTok and Facebook. The Ministry of Trade said it banned social media from doubling as an e-commerce platform to prevent misuse of public data.

"Social media and e-commerce must be separated so that algorithms are not completely controlled and personal data can be prevented from being used commercially," Indonesian Trade Minister Zulkifli Hasan said on Monday.

Indonesia also said it would monitor overseas goods sold on the platform on the pipeline and said it would treat them like Indonesian domestic goods. At present, Indonesian users can buy more and more foreign goods through social media platforms.

On Saturday, Indonesian President Joko called for the regulation of social media because of the negative impact of these platforms on local businesses and the economy.

"We know that this has had an impact on small and medium-sized enterprises and related markets," Joko said in a statement. sales in some markets began to decline as a result of the influx of goods. "

Indonesia's approach will affect TikTok's goal of developing e-commerce there.

Indonesia is TikTok's second-largest market, with 113 million users, second only to 116.5 million in the United States, according to research firm DataReportal.

In June this year, TikTok CEO Zhou Jie said that TikTok plans to invest tens of billions of dollars in Indonesia and Southeast Asian markets in the next few years.

"the emergence of social ecommerce is to solve the practical problems faced by traditional local small vendors," a TikTok spokesman said in response to comments from Indonesia's Ministry of Trade. "We respect local laws and regulations, but hope that these regulations will take into account the impact on the livelihoods of more than 6 million sellers and nearly 7 million creators of related content who use TikTok Mall."

Citibank said in a report on Tuesday that Indonesia's move was beneficial to Shopee, an e-commerce company owned by Southeast Asian consumer ecommerce company SeaLimited, and other domestic companies.

"given the recent fierce competition between TikTok and Shopee, we think this is a positive move for traditional Indonesian e-commerce companies, especially for Sea Limited," Citibank said in the report.

"based on the timing of implementation and the transition to alternative applications, we believe that any obstacles encountered by TikTok sellers during the transition period are likely to benefit Shopee and other traditional ecommerce platforms in the coming months," Citibank said.

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