You must be aware about a report we did earlier this week where Indonesia announced that they are banning the use of e-commerce on social media apps because it has been causing a lot of foreign products entering the local markets and due to that reason, the local businesses are suffering. Obviously, the President of Indonesia, without naming names was targeting TikTok shop and Facebook marketplace for this. Once the new regulations were announced, which have been made effective immediately, it was clear that TikTok would have to shut down its “Shop” which is the e-commerce division of the Chinese company ByteDance. It is worth noting that, as expected, TikTok has now announced that it will stop the e-commerce initiative of the company in Indonesia.
In a statement, TikTok said, “Our priority is to remain compliant with local laws and regulations,” “As such, we will no longer facilitate e-commerce transactions in TikTok Shop Indonesia by 17:00 GMT+7, October 4, and will continue to cooperate with the relevant authorities on the path forward.” Obviously, TikTok hopes that Indonesia would allow them to operate its e-commerce division inside the app but we highly doubt that would happen because of the rules and regulations being the same for everyone. It is worth noting that Indonesia is one of the biggest markets for TikTok Shop in Southeast Asia and the concept of live stream shopping has been originating from the country as well. Due to that reason, TikTok has been dealt a major blow and its options are very limited right now.
Note that TikTok does have an option to still operate the Shop e-commerce on a new app as Indonesia’s regulations allow it to work on a new standalone app separate from the social media app but we all know that the purchases made from TikTok Shop were impulse buys looking at the products from video so going to a different app and buying from there would be the same as looking at a TikTok video, going to Amazon and buying the product. It will then come down to pricing and that is now what TikTok wants.
