TikTok's Indonesian stores shut down, affecting millions of sellers and influencers

According to the latest news from foreign media, the social media app TikTok has decided to suspend its online shopping service in Indonesia to comply with new regulations in Southeast Asia's largest economy.

Local authorities said the rules were designed to help protect local brick-and-mortar and online retailers.

It is understood that Indonesia was the first country to pilot TikTok's e-commerce service in 2021, and it once became one of TikTok Shop's largest markets.

Last week, Indonesia announced regulations that will force TikTok to separate its shopping features from its short video function.

Announcing the measures, Indonesian Trade Minister Zulkifli Hasan said: "E-commerce cannot be linked to social media, they need to be separated."

He also told the social media platform that they had a week to make adjustments or risk having their license to operate in Indonesia revoked.

"We need to be careful with the e-commerce industry, " Indonesian President Joko Widodo said last month. "If there are regulations, it could be good, but if there are no regulations, the situation could become bad."

"Our top priority is to comply with local laws and regulations," TikTok said in a statement on Tuesday.

Indonesia's online retail sector has grown significantly in recent years, with e-commerce sales expected to grow more than sixfold to 689 trillion rupiah (US$44 billion) from 2018 to 2024, according to central bank data.

Data shows that TikTok Shop has been growing its market share since it entered the Indonesian online shopping market two years ago. This country with a population of 278 million has 125 million TikTok users, including 6 million sellers and millions of creators who make money through TikTok Shop.

Still, the growth of online retailers has had a major impact on brick-and-mortar shop owners like Sukmaalingga, who has run a shop selling Muslim clothing such as kaftans in a Jakarta market for nine years.

"Although I often post photos of new clothes, there are no customers from Indonesia coming to buy them now," he told BBC Indonesia News.

Indonesian government data shows that there are more than 64 million small businesses in Indonesia, accounting for nearly two-thirds of the Indonesian economy. By cracking down on the development of the e-commerce industry, the government's goal is to protect the survival of local small and medium-sized enterprises.

TikTok

Indonesia

E-commerce