Jakarta, Sep 27 (EFE).- The Indonesian government has approved new regulations that prohibit e-commerce transactions on social media platforms, with a particular focus on TikTok, which has significantly expanded its online store presence in the country in recent years.
“The regulation has been promulgated, and social media platforms have seven days to comply with it,” Indonesian trade minister Zulkifli Hasan said in a press conference on Wednesday.
The new trade regulations have already come into effect on Tuesday, he said.
The regulations explicitly ban direct transactions and payments on social media platforms, allowing them only to promote goods and services, instead of providing e-commerce services.
E-commerce and social media services must be “separated,” Hasan insisted.
According to the new rules, imported products offered by e-commerce platforms must carry “halal” certificates, making them authorized for Muslim consumption, and must be sold for a minimum price of $100.
The minister said that these regulations were intended to curb monopolistic practices by social media platforms and safeguard the interests of small and medium-sized Indonesian businesses.
Moreover, the measures aim to protect personal information from being exploited for commercial purposes by the social media networks.
These regulations will have a direct impact on TikTok’s e-commerce services, as Indonesia ranks as its second-largest market with 113 million users, just slightly behind the United States, where it boasts of 116.5 million users, according to the consulting firm DataReportal.
In June, TikTok’s CEO, Shou Zi Chew, announced plans to invest billions of dollars in Southeast Asia in the coming years to boost its presence in the regional e-commerce sector.
Indonesia was the first Southeast Asian country where TikTok introduced its online shop in 2021 before expanding to Thailand, Vietnam, Malaysia, the Philippines, and Singapore.
While TikTok made rapid strides, its application store, TikTok Shop, still trails significantly behind major e-commerce players in Southeast Asia, such as Singapore’s Shopee and Lazada, both owned by Alibaba.
TikTok has expressed concerns that Indonesia’s new regulations could negatively impact innovation, businesses, and its e-commerce users in the country.
“Nearly two million local businesses in Indonesia use TikTok to grow and thrive through social commerce,” TikTok’s head of communication in Indonesia, Anggini Setiawan, said in a statement.
“Forcing social media and e-commerce to separate into different platforms would not only hamper innovation, it would also disadvantage Indonesian merchants and consumers,” she criticized. EFE