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Indonesia to issue regulations on social commerce this week
Ministers have repeatedly said that e-commerce sellers using predatory pricing on social media platforms are threatening offline markets in Indonesia, with some officials specifically citing the video platform TikTok as an example.
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President Joko Widodo (centre right) and Philippine President Rodrigo Duterte (centre left) visit Tanah Abang market in Jakarta on September 9, 2016. (AFP/Bay Ismoyo)
T
he government may issue on Tuesday a regulation on the use of social media to sell goods in the country, President Joko "Jokowi" Widodo said, a move intended to quell threats to offline markets in Indonesia.
Ministers have repeatedly said that e-commerce sellers using predatory pricing on social media platforms are threatening offline markets in Indonesia, with some officials specifically citing the video platform TikTok as an example.
"We just...decided on the use of social media for e-commerce. Tomorrow it will perhaps come out," Jokowi said in a streamed video address on Monday.
"What the people are expecting is that the advancement of technology can create new economic potential, not kill existing economies."
Jokowi did not mention any specific companies or offer further details on the regulation, which is being formulated by the Trade Ministry.
Current trade regulations do not specifically cover direct transactions on social media.
Deputy Trade Minister Jerry Sambuaga said earlier this month that "social media and social commerce cannot be combined," vowing to ban the mix of the two and citing TikTok's "live" features which allow people to sell goods.
A TikTok Indonesia spokesperson declined to comment. TikTok is owned by Chinese tech company ByteDance.
The company said that its app had 325 million Southeast Asian users that were active every month, of whom 125 million were in Indonesia. The company has said that there were 2 million small businesses on TikTok Shop in Indonesia.
Earlier in September, TikTok criticised calls by officials to ban social media transactions.
"Close to two million local businesses in Indonesia use TikTok to grow and thrive through social commerce," Anggini Setiawan, TikTok Indonesia's head of communications told AFP.
"Forcing social media and e-commerce to separate into different platforms would not only hamper innovation, it would also disadvantage Indonesian merchants and consumers."
Indonesia users spent more money on TikTok than anywhere else in Southeast Asia over the past year, as the app's e-commerce arm rapidly grew to gain a substantial regional market share and millions of sellers since its 2021 launch.
