TikTok retail operation was canceled in Indonesia to comply with the country’s decision to ban e-commerce transactions on social media platforms. The cancelation of TikTok retail in the region is a massive blog to the social media fastest-growing market country in Asia.
A few months ago, the Indonesian government announced the new regulation, which prohibits social media companies from facilitating sales of products on their platforms, on Sept. 28 in a bid to protect small businesses from e-commerce competition, accusing the popular apps and websites of predatory pricing.
The Chinese-owned video-sharing app said in a statement it will stop facilitating e-commerce sales in TikTok Shop Indonesia by 5 p.m. Wednesday.
Indonesia’s Trade Minister Zulkifli Hasan said the ban aims to “prevent the domination of the algorithm and prevent the use of personal data in business interests" and "create a fair, healthy and beneficial electronic commerce ecosystem,” according to a statement released by the Trade Ministry when the ban was announced.
TikTok, owned by the Chinese group ByteDance, expects to reach 20 billion dollars (18.75 billion euros) in e-commerce this year, more than quadrupling last year's figures, when it invoiced 4.4 billion dollars (4.125 billion euros), according to Bloomberg.
The main explanation for this exponential upturn in its gross merchandise sales is the expected growth in Southeast Asia. In this market, TikTok is making a notable commitment, for example, in Indonesia, where now the social network will surely face considerable looses.
TikTok's e-commerce platform allows customers to purchase products through links in the app during live broadcasts. They can also access marketplaces through a tab on the app's home screen to search and browse.
Beyond Southeast Asia, the company is also working to expand its sales in the United States and Europe. In fact, TikTok Shop debuted this month in the U.S. market with some 150 million active users.
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