TikTok Shop Officially Closes in Indonesia Starting October 4, 2023

The Indonesian government made headlines on Thursday, October 4, 2023, by officially announcing the closure of TikTok Shop, an online shopping platform that had long been a favorite among users.

This unexpected decision has left many questioning the reasons behind the shutdown. In this article, we will provide a comprehensive explanation of the TikTok Shop closure, the underlying regulations, and its implications for millions of users.

The Regulations Leading to TikTok Shop Closure

The closure of TikTok Shop was grounded in new regulations issued by the Minister of Trade, Zulkifli Hasan, on September 26, 2023. These regulations primarily focus on prohibiting social media platforms, such as TikTok, from engaging in e-commerce-like activities, a concept known as social commerce.

A crucial point within these regulations is Article 21, Section 3, which stipulates that social commerce platforms like TikTok Shop are prohibited from facilitating electronic payment transactions within their systems. This action is taken to prevent predatory pricing, which could harm both the market and consumers.

The ban on selling through TikTok now falls under Minister of Trade Regulation No. 31 of 2023 regarding Business Licensing, Advertising, Development, and Supervision of Business Actors in Electronic Trading. This regulation is a revision of Minister of Trade Regulation No. 50 of 2020, which previously governed TikTok Shop operations.

TikTok's Response

TikTok, the popular Chinese music video platform, has responded positively to the closure of TikTok Shop. They have declared their commitment to cooperate with the Indonesian government and adhere to the applicable legal regulations.

In their official statement, TikTok announced, "Henceforth, we will no longer facilitate e-commerce transactions within TikTok Shop Indonesia, effective from October 4 at 5:00 PM WIB. We will continue to coordinate with the Indonesian Government regarding our future steps and plans."

Consequences for TikTok and its Users

Minister of Trade, Zulkifli Hasan, emphasized that TikTok would face sanctions if they violated the established rules. However, it's crucial to note that the government allows TikTok to operate as an e-commerce platform as long as they obtain the necessary permits.

The closure of TikTok Shop has had a significant impact on millions of TikTok users. Over 13 million users, comprising six million sellers and seven million creators, have lost opportunities to profit from the TikTok platform. This represents a major shift in the Indonesian e-commerce ecosystem.

The Indonesian government's decision to shut down TikTok Shop has created significant turmoil in the world of e-commerce and social media. The underlying regulations and TikTok's response have become hot topics of discussion.

While TikTok users must seek alternative avenues for selling and creative expression, compliance with the law remains key to maintaining market stability and consumer protection.