TikTok online shopping business shuttered in Indonesia over ‘complicated issue’ as company works for resumption
Published: Oct 11, 2023 05:55 PM
TikTok Photo: VCG

TikTok Photo: VCG

The suspension of online shopping operations of TikTok in Indonesia is temporary and the company is striving to resume the business after completion of remaking as early as possible, the company said.

Kang Yuze, leader of TikTok's online shopping operations, said in the letter that according to the new e-commerce bill recently introduced in Indonesia, the social media platform needs to make compliance changes to its products and business to meet regulatory needs in Indonesia, domestic news outlet TMTpost reported on Wednesday.

The closure of e-commerce operation within the app came "quite suddenly," and the reasons behind it are quite complicated, said Kang, noting that he is actively discussing with the local government and the regulators.

TikTok Indonesia announced it will end transactions on its e-commerce marketplace by October 4, in order to comply with new regulations.

"Our priority is to remain compliant with local laws and regulations. As such, we will no longer facilitate e-commerce transactions in TikTok Shop Indonesia by 17:00 GMT+7, October 4, and will continue to cooperate with relevant authorities on the path forward," TikTok said in a statement dated October 3.

The announcement came after the Indonesian government at the end of September required social media platforms including TikTok and Facebook to halt any e-commerce services, the move of which is aimed at protecting offline merchants and marketplaces.

The ban on the marketplace of TikTok, owned by Chinese tech giant ByteDance, came three months after TikTok CEO Shou Zi Chew said in June that the company would invest billions of dollars in Indonesia and other countries in Southeast Asia over the next few years.

Since its launch in Indonesia, TikTok Shop has served 80 million Indonesian users, millions of sellers and creators have earned income through the platform, company data showed.

An industry report released by China-based FastDate showed that as of June 2023, in terms of user activity for TikTok, the Indonesian market ranked second with 113 million users, second only to the 150 million in the US market.

In the first half of the year, the total duration and total number of viewers of TikTok's live broadcasts with goods were highest in Indonesia, followed by Vietnam and Thailand, according to the report. 

The suspension of online shopping operations on TikTok in Indonesia has triggered concerns among sellers in other Southeast Asian countries where signs of similar tightening regulation have shown up.

The Malaysian government will look into the action taken by the Indonesian government to ban e-commerce transactions on TikTok before devising appropriate measures in the country, Malay Mail reported on Saturday, citing the country's Communications and Digital Minister Fahmi Fadzil.

Global Times