TikTok and YouTube are considering joining Meta in applying for e-commerce licenses in Indonesia after Southeast Asia’s largest economy banned online shopping on social media platforms, people familiar with the discussions said. The ban blew the short video app TikTok, which has 125 million active monthly users nationwide and has been looking to translate its massive user base into a significant e-commerce revenue source through its locally developed platform, TikTok Shop. The company said it was “deeply concerned” about the ban and worked to find a constructive path forward.
This month, the government implemented the rule, saying it sought to protect small and midsize offline merchants and marketplaces from predatory pricing by online platforms. A ministry statement said it also aimed to ensure users’ data was protected. The trade minister, Zulkifli Hasan, said the regulation would ensure e-commerce was separated from social media so that it would not become “another shopping and bank.” He added that offline sellers were seeing their livelihoods threatened by cheaper products offered on platforms like TikTok Shop.
Indonesia’s e-commerce market is dominated by local tech firm GoTo’s Tokopedia, Sea’s Shopee, and Alibaba’s Lazada, with nearly $52 billion in transactions last year. But TikTok Shop has gained a substantial share since its launch in 2021, with millions of sellers using the platform to sell their goods and services.
TikTok, owned by China’s ByteDance, has pushed into the region in recent months, pledging to invest billions of dollars in Southeast Asia, focusing on Indonesia and its large population. The company has rolled out TikTok Shop in the region and is targeting a revenue run rate of $10 billion by 2020.
Meta, which owns Facebook and Instagram in Indonesia, has applied for an e-commerce license this month that will enable it to promote products but not facilitate direct transactions, the country’s director general of domestic trade, Isy Karim, told Reuters. She said the permit would allow the company to advertise and conduct market surveys but not support in-app purchases. Meta did not immediately respond to a request for comment. The ban may prompt other countries in the region to consider similar moves, including Malaysia, which has many internet users but is less developed than Indonesia.
