Indonesia to ban purchases on social media platforms like TikTok

on Sep27
by | Comments Off on Indonesia to ban purchases on social media platforms like TikTok |

Two sellers offering merchandise for sale through a TikTok livestream.

Bay Ismoyo | Afp | Getty Images

Indonesia’s ministry of trade said Tuesday it is working to further regulate e-commerce, adding that the country does not allow transactions on social media platforms.

“One of the things that is regulated is that the government only allows social media to be used to facilitate promotions, not for transactions,” the ministry said in an official release.

This means that users in Indonesia cannot buy or sell products and services on TikTok and Facebook.

The government said it will also bar social media companies from doubling as e-commerce platforms to prevent misuse of public data.

In a media conference Monday, Minister of Trade Zulkifli Hasan said that “the connection [between social media and e-commerce] must be separated so that the algorithm is not all controlled” and this “prevents the use of personal data” for business purposes.

Indonesia also said it would also regulate which overseas goods can be sold, adding these products would receive the same treatment as offline domestic goods. The move comes as foreign goods become increasingly available in Indonesia through social media platforms.

We're not banning social media sites, just trying to regulate them: Indonesia vice minister of trade

On Saturday, Indonesia’s President Joko Widodo called for social media regulations, citing the platforms’ impacts on local businesses and the economy.

“Because we know it affects MSMEs, small businesses, micro-enterprises, and also the market. There are markets where sales have started to decline due to the influx,” he said a statement.

A blow to TikTok

Citi said in a Tuesday report that the move benefits competitor Shopee, the e-commerce arm of Sea Limited, and Indonesia’s domestic players.

“We view this as a positive development for traditional e-commerce players in Indonesia — particularly Sea Ltd., given the latest competitive intensity between TikTok and Shopee,” the global investment bank said in its report.

“Depending on the timing of the implementation and the transition process to the possible alternative app, in our view, any disruptions that TikTok sellers experience during the transition will likely be beneficial to Shopee and other traditional e-commerce platforms in the coming months,” said Citi.

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