President Joko Widodo (pic) said new regulation on social media commerce could be passed soon, as Jakarta aims to rein in sales on tech platforms it says are harming local businesses.
Indonesian users spent more money on TikTok than anywhere else in South-East Asia over the past year, as the app’s e-commerce arm rapidly grew to gain a substantial regional market share and millions of sellers since its 2021 launch.
Several government officials in recent weeks have called for social media and e-commerce to be separated, taking aim at sales platforms they say engage in monopolistic practices that threaten small businesses.
“We just decided in a meeting about social media which are being used as e-commerce. Tomorrow it will perhaps come out,” Joko said Monday in a video address, without naming any companies.
“The big umbrella of regulations about digital transformation should be made more holistic, and it is being done by the government. So that technological developments... can create new economies, not kill existing economies.”
The ministerial-level regulation – an amendment to a trade regulation issued in 2020 – will not need approval by lawmakers. In Indonesia, most regulations can be issued by the government unilaterally, while a law requires parliamentary approval.
TikTok did not immediately respond to a request for comment, but said in a statement this month that Indonesia should “provide a level playing field” for the platform, arguing new regulation would harm the country’s sellers and consumers.
Trade Minister Zulkifli Hasan told reporters after the meeting with Joko that he would sign the regulation soon.
“Social commerce can only facilitate promotion of goods and services, not direct transactions,” he said.
The minister said social media and e-commerce “should be separated”, adding that the government would impose a US$100 minimum purchase per transaction on imported goods.
TikTok Shop has amassed more than two million Indonesian sellers since its launch two years ago.
US tech giant Meta also uses e-commerce shops on its social media platforms Facebook and Instagram.
Indonesia is TikTok’s second-largest market, with 125 million users, according to company figures. It is owned by Chinese technology giant ByteDance.
TikTok’s chief executive Shou Zi Chew visited Jakarta in June, pledging to pour billions of dollars into South-East Asia in the coming years. — AFP
