TikTok suspends social media e-commerce after Indonesia bans it, sellers worried

On Tuesday, TikTok said it will suspend its Indonesian e-commerce transactions from Wednesday onwards, following the Indonesian government’s new social media regulations.

In a statement, TikTok said that their priority was to remain compliant with the local regulations and laws.

Announced and enacted last week, the new regulation forbids social media firms from enabling sales of products on their platforms. Regulators argued that predatory pricing on social media platforms could harm traditional marketplaces and offline stores. 

The new laws and regulations also require e-commerce platforms, in addition to ones not on social media, to set a government-enforced minimum price of $100 for select items directly purchased from abroad, which is also intended to protect local retailers.

On September 26, Minister of Communication and Informatics Budi Arie Setiadi stated that the new restriction intends to "ensure to protect domestic micro, small, and medium-sized enterprises fairly," adding that it was also designed to protect user data.

Although it does not specifically mention TikTok, the new regulation comes as the Southeast Asian online market's most well-known platform for the China-born app, whose owner, ByteDance, is looking to grow its business there.

Indonesia is already a key market for TikTok. The second-largest TikTok user base after the United States was in Indonesia, with 99.8 million members as of July, according to research firm Statista.

In a statement released on September 27 in response to the Indonesian government's announcement of the regulation, a representative for TikTok Indonesia stated, "We are deeply concerned." Particularly how it would affect the livelihoods of the roughly 7 million affiliate artists and 6 million sellers who utilize TikTok Shop, it was added.