TikTok: Social media app halts online shopping service in Indonesia

A trader is conducting live sales via streaming at Tanah Abang Market, Jakarta.

Mariko Oi, by

columnist for company

In order to comply with new regulations in the largest market in South East Asia, the social media app TikTok is suspending its virtual shopping company in Indonesia.

The change will go into influence at 17:00 GMT in Jakarta.

The laws, according to the nation’s state, are intended to aid in safeguarding neighborhood physical and online retailers.

Indonesia became one of the largest markets for TikTok Shop after being the first nation to test the phone’s e-commerce company in 2021.

Indonesia announced rules last week that would compel TikTok to separate its purchasing feature from the well-known video sharing service there.

The measures were announced by Indonesia’s industry minister Zulkifli Hasan, who stated that” e-commerce cannot now be social media.” It’s divided.

Additionally, he warned social media sites that they had a year to follow the new regulations or risk losing their national operating license.

The declaration was made following what Indonesia’s President Joko Widoo said next fortnight:” We need to be careful with e-commerce.” If there are laws, it can be very good, but if none are present, things can get poor.

In a statement released on Tuesday, TikTok stated that” remaining compliant with local laws and regulations is our top focus.”

It continued,” As a result, we will no longer support e-commerce deals in TikTok Shop Indonesia.”

Indonesian virtual shopping has increased significantly in recent years. According to the nation’s central bank, the value of e-commerce sales will have multiplied more than fourfold between 2018 and the following year to reach 689 trillion Indian rupiah($ 44bn,$ 356.5 billion ).

Since its two-year start into Indonesia’s online shopping industry, which is dominated by sites like Tokopedia, Shopee, and Lazada, TikTok Shop has increased its business communicate.

125 million TikTok people reside in the nation of more than 278 million people. That includes the 6 million dealers and the millions more authors who profit from the product promotion on TikTok Shop.

Shou Zi Chew, the agency’s CEO, traveled to Indonesia in June and made a commitment to spend billions of dollars there over the following three to five years.

Owners of real stores like Sukmamalingga, who operated a shop selling Arab clothes like kimonos at Tanah Abang Market in Jakarta for nine years, have been significantly impacted by the expansion of online stores.

Even though I frequently send pictures of new designs of clothing, none of my clients from areas in Indonesia buy again, he told BBC News Indonesia.

According to federal statistics, there are more than 64 million smaller companies, also known as micro, small, and medium enterprises, which make up about two-thirds of Indonesia’s market.

The new rules are yet another blow for TikTok, which has come under scrutiny in the US, EU, and UK, where Parliament has barred the apps from its network due to security concerns.