TikTok is Prohibited From Combining Social Media and E-Commerce in Indonesia

Indonesia's New Regulations Impacting TikTok: Separating Social Media and E-commerce

Handoyo Saputra | September 08, 2023

Tiktok ecommerce

In recent developments, the Indonesian government has taken decisive steps regarding the usage of TikTok, the popular Chinese-origin social media platform that has garnered global attention.

The Minister of Cooperatives and Small and Medium Enterprises (MenKopUKM), Teten Masduki, recently announced that TikTok is no longer allowed to operate both social media and e-commerce businesses simultaneously in Indonesia.

TikTok is a social media application that enables users to create and share short videos, often set to music and dance. It has gained immense popularity among the youth worldwide, becoming a crucial platform in the realms of digital marketing and entertainment.

According to Minister Teten, this decision aligns with the actions taken by the United States and India. In these countries, TikTok has been prohibited from combining social media and e-commerce businesses on a single platform. However, in Indonesia, TikTok is still permitted to run both types of businesses concurrently.

TikTok Allowed to Continue Selling, But Not Social Media Integration

While TikTok is no longer allowed to merge social media and e-commerce businesses, it is still permitted to engage in selling activities. However, it's essential to note that TikTok is prohibited from integrating its business with other social media platforms. This measure is put in place to prevent monopolistic practices that could harm domestic Small and Medium Enterprises (SMEs).

TikTok Shop
TikTok Shop

Minister Teten points out that research indicates online shopping behavior is often influenced by social media conversations. Additionally, payment systems and logistics are frequently controlled by major platforms. Hence, it is crucial to separate social media and e-commerce businesses to ensure healthy competition.

In addition to TikTok-related regulations, Minister Teten plans to regulate cross-border commerce to enable domestic SMEs to compete in the Indonesian digital market. Foreign retailers will no longer be allowed to sell products directly to consumers.

They must follow standard import mechanisms before they can sell their products in the Indonesian digital market. This is done to ensure that Indonesian SMEs have an equal opportunity in business competition.

The government also intends to prohibit digital platforms from selling their products or products affiliated with them. The goal is to prevent digital platform owners from manipulating their algorithms to favor their businesses. With these measures, it is hoped that there will be more opportunities for SMEs and other small businesses to thrive.

The regulatory steps taken by the government aim to create a healthy business environment, protect SMEs, and regulate the importation of goods to be fair and in line with national interests.

Source: Merdeka.com

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