The government has taken action to crack down, and 2 million e-commerce sellers may lose their jobs!

For a country with a population of 270 million and a thriving e-commerce sector, Indonesia is expected to see nearly $52 billion in e-commerce transactions in 2022, a large portion of which is achieved through social media.

Therefore, if this regulation is implemented, it is likely to deal a major blow to the country's e-commerce industry and social media platforms.

The move is said to be due to the local government's concerns about aggressive pricing by e-commerce sellers on social media, which has been seen as a threat to the Southeast Asian country's traditional offline market.

According to insiders, Indonesian Deputy Trade Minister Zeng Jieri Sambuaga made it clear in his speech to parliament that "social media and e-commerce cannot be combined."

TikTok has also expressed its concerns about this regulatory change . The short video platform believes that separating social media and e-commerce may hinder the pace of innovation and development.

Currently, TikTok's influence in Indonesia's e-commerce field has been growing through its TikTok Shop.

It is worth noting that TikTok currently has as many as 125 million users in Indonesia. According to TikTok, 2 million small businesses in the country are using its TikTok Shop feature. In addition, according to consulting firm Momentum Works, about 5% of e-commerce transactions in Indonesia come from TikTok.

Based on this status quo, TikTok hopes that the Indonesian government can ensure a level playing field for all players in the industry as the company seeks to strike a balance between regulation and the evolving digital landscape.

In fact, it is not just TikTok that is affected . Meta's Facebook may also be affected by these new rules because Facebook also has e-commerce functions on the platform.

Indonesia

E-commerce

Social Media