Indonesia sets one-week deadline for TikTok Shop to become standalone app

Photo credit: 123rf

Jofie Yordan also contributed to this report. 

The Indonesian Ministry of Trade has announced revised ecommerce regulations that could potentially ban TikTok Shop from operating in Indonesia.

In a press conference in Jakarta earlier today, Trade Minister Zulkifli Hasan said that the regulations came with a one-week grace period. This means that TikTok Shop must become a standalone app within one week, or it will be shut down.

The new rules prohibit social commerce platforms, such as TikTok, from allowing in-platform transactions and from using social media users’ data for ecommerce purposes.

As Tech in Asia previously reported, regulators in Indonesia have been looking into TikTok over fears that TikTok Shop – a feature integrated into the main app – is monopolizing the market.

Multiple Indonesian government officials have been openly criticizing TikTok. They include President Jokowi, who recently said that social commerce platforms like TikTok Shop have played a role in the downslide of MSMEs and traditional markets.

In a statement to Tech in Asia, a TikTok Indonesia spokesperson said the new regulations could impact livelihoods of more than six million sellers and close to seven million affiliate creators who use TikTok Shop.

“We are deeply concerned about today’s announcement,” the person said. “We respect local laws and regulations and will be pursuing a constructive path forward.”

Launched in Indonesia just over two years ago, TikTok Shop has had explosive popularity.

The country has about 125 million monthly active TikTok users, while TikTok Shop recorded a gross merchandise value (GMV) of US$2.5 billion in 2022 – 57% of its GMV in Southeast Asia, according to venture builder Momentum Works.

See also: Uncertain future: TikTok Shop faces first regulatory headwinds in Indonesia

Update (Sept. 27, 20:10 p.m. SGT): This article was updated to include a statement from TikTok Indonesia.