At a crossroads: Indonesia’s elections will decide tech future

With Indonesia’s presidential elections scheduled to take place on February 14, the tech industry is anxiously awaiting to see how – or if – the new government will continue Joko Widodo’s legacy.

The Indonesian president, widely known as Jokowi, has served two consecutive terms and is credited with boosting Indonesia’s digital economy, which was worth almost US$80 billion last year.

In 2022, he met with Tesla CEO Elon Musk at the SpaceX launch facility in Boca Chica, US, as part of his administration’s efforts to court Tesla to build a factory in Indonesia. Even though Tesla later backed out, the country’s nickel reserves remain a selling point to attract other EV giants.

(From left) Indonesia’s 2024 presidential candidates Prabowo Subianto, Anies Baswedan, and Ganjar Pranowo / Image credit: Timmy Loen

Beyond the nation’s digital economy, many are also closely watching the stance of incoming leadership on protecting SMEs, a key issue in last year’s controversial ban on TikTok Shop.

TikTok went on to seal a deal with Tokopedia. However, the broader ramifications of this decision and future SME support remain unclear in the post-Jokowi era.

Maintaining a grip on social commerce?

Puteri Anetta Komarudin, spokesperson for the campaign of presidential candidate Prabowo Subianto, tells Tech in Asia that the frontrunner intends to maintain the ban on direct transactions on social media. He aims to limit its use solely to promoting the sale of goods.

This isn’t a surprise. His running mate, vice presidential candidate Gibran Rakabuming Raka (Jokowi’s eldest son), previously voiced his support for prohibiting TikTok Shop, citing concerns about its negative impact on local MSMEs.

Workers and motorists pass by billboards displaying pictures of the three presidential candidates for the 2024 elections in Jakarta./Photo credit: Shutterstock

Last week, TikTok announced that it had finalized a deal to acquire a 75% stake in Tokopedia valued at US$2.2 billion, according to GoTo’s latest public disclosure. This acquisition paves the way for TikTok Shop’s return to the Indonesian market.

Although it may seem like a “concession,” TikTok now has nearly full control over Tokopedia, Shopee’s main competitor in the country. Former Jakarta-based ByteDance executive Vonny Ernita Susamto has also taken over as the new CEO of Tokopedia, indicating just how much of a grip the social media firm has on the Indonesian ecommerce platform.

However, local regulators are expected to continue monitoring the operations of the TikTok-Tokopedia entity, and potential policy shifts in the incoming administration could still influence this merger.

For example, the two other presidential candidates – former Jakarta governor Anies Baswedan and former Central Java governor Ganjar Pranowo – take a different stance about how the Jokowi government handled TikTok Shop last year.

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