After Indonesia Bans Social Media E-commerce Transactions, TikTok May Usher In A New Turning Point

TikTok and YouTube are considering following Meta's lead and jointly applying for an e-commerce license in Indonesia after Indonesia, Southeast Asia's largest economy, banned online shopping on social media platforms, insiders revealed.

The Indonesian Ministry of Trade banned e-commerce transactions on social media a month ago. This move was mainly to protect small and medium-sized physical merchants and markets, while ensuring the security of user data.

According to a report by consulting firm Momentum Works, Indonesia has a population of more than 270 million and e-commerce transaction volume last year reached nearly US$52 billion.

The decree is a serious challenge for TikTok because the company in June pledged to invest billions of dollars in Southeast Asia including Indonesia, mainly to promote its e-commerce service TikTok Shop.

In Indonesia, TikTok has 125 million users.

Two internal sources revealed that the short video app is planning to apply for an e-commerce license in Indonesia and is looking for the best way to apply.

Inside sources also said that TikTok is discussing the possibility of cooperation with leaders in the local e-commerce industry, and is also considering developing an exclusive TikTok Shop application for Indonesia.

Before TikTok Shop ceased operations in Indonesia this month, the company was said to have delivered about 3 million packages a day in Indonesia.

TikTok said it could neither confirm nor deny that the company was considering applying for a license.

Two other sources revealed that YouTube is also considering applying for an e-commerce license in Indonesia, but did not specify the type of license. YouTube has launched a shopping service in the US for creators to promote products and brands on the platform.

Isy Karim, director of domestic trade at the Indonesian Trade Ministry, said Meta, the owner of Facebook and Instagram, had applied this month for an e-commerce license that would allow the promotion of goods on its platforms but not direct sales. E-commerce transactions.

Isy Karim said this license would allow vendors to conduct product advertising and market research, but not in-app transactions. However, he also said that YouTube and TikTok have not yet contacted the government regarding applications.