Revised ecommerce rules could decide TikTok Shop’s fate in Indonesia

Photo credit: ByteDance

Indonesia’s Ministry of Trade plans to officially release revised regulations on ecommerce as early as this week, an official told Tech in Asia. The move could determine the fate of TikTok Shop, the ecommerce arm of the popular short-video platform, in the country.

Isy Karim, the ministry’s director general of domestic trade, said the updated rules are being finalized before submission to the law ministry.

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

One of the most contentious points covered by the revised rules is whether ecommerce transactions should be prohibited on social media platforms.

The government is also considering a ban on the sale of imported goods priced below US$100 through cross-border services on ecommerce platforms and barring marketplaces from acting as manufacturers.

Indonesian President Joko Widodo recently said that social commerce platforms like TikTok Shop have played a role in the downslide of MSMEs and traditional markets.

“TikTok is supposed to be a social media, not an ‘economic media,'” he remarked during a trip last week to East Kalimantan, where the country’s planned capital city is being built.

Meanwhile, TikTok has called on the Indonesian government to provide a “level playing field” regarding the proposed rules.

“Forcing social media and ecommerce to separate into different platforms would not only hamper innovation but also disadvantage Indonesian merchants and consumers,” a TikTok spokesperson earlier told Tech in Asia.

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