As we had reported earlier this week, Indonesia was preparing to release a new draft of regulations on e-commerce transactions that are taking place on social media which directly relates to usage of live shopping on apps such as TikTok and others and we were already telling you that this could be big for them because if the country does something against the transactions then it could be a major blow for ByteDance as well as others who were absolutely thriving in the country because of this new medium.
TikTok, sensing the gravity of this situation, had said that they are also concerned about what the new regulations would be but also said that they hope the government takes care of the economies involved in the decision as well. However, we got indications from Indoniesian ministers that they are thinking of the offline markets which are being destroyed due to the e-commerce business. And, as expected, Indonesia has announced that they are banning the use of e-commerce transactions on social media which means that TikTok will be dealt a huge blow.
We know that there are others as well but TikTok Shop is one of the biggest players in the live stream shopping sector followed by other regional players too. Indonesian Government says that this move “is aimed at protecting offline merchants and marketplaces, adding that predatory pricing on social media platforms is threatening small and medium-sized enterprises” and also mentioned that this will be implemented effective immediately after the announcement. TikTok spokesperson said that they are “deeply concerned” and trying to play the blame game said that they are worried about “how it would impact the livelihoods of the 6 million local sellers active on TikTok Shop”.
It is said that Indonesia is very strict in the implementation of its policies which means that the usage of e-commerce on social media will come down to zero almost immediately. Something strange was that Indonesia now “requires e-commerce platforms in Indonesia to set a minimum price of $100 for certain items that are directly purchased from abroad” which is not clearly understood at first glance so we will have to dive deeper into it.
