TikTok Shop is Over: Indonesian Minister
Jakarta GlobeSep 15, 2023
On Wednesday, TikTok Indonesia halted its online shopping service to avoid being shut down. The move followed a government order last week, which requested the app drop its e-commerce feature.
The social media giant must now obtain a license from Indonesia's Ministry of Trade and create a standalone app so it can continue operating. The country is TikTok Shop's largest e-commerce market in Southeast Asia in terms of gross merchandise value.
Jakarta has taken decisive action to balance e-commerce with physical market operations, protecting local shops from being squeezed out of business — TikTok has wisely adhered to the new rule. Like television networks, the video-sharing app can carry advertisements but cannot establish shops.
While the Indonesian government claims to be leveling the field, new regulations clearly show an alignment with established players to the detriment of disruptive micro, small, and medium enterprises that have grown through digitalization. This policy may help some underprivileged businesses but is also likely to hurt technological progress in the country.
There's a 4% chance that the US will ban TikTok before 2024, according to the Metaculus prediction community.