Monday, April 15, 2024
Homese asiaIndonesia to ban goods transactions on social media: Deputy minister

Indonesia to ban goods transactions on social media: Deputy minister

JAKARTA – Indonesia is planning to ban goods transactions on social media under new trade regulations, the deputy trade minister told a parliamentary hearing on Tuesday.

Ministers have repeatedly said that e-commerce sellers using predatory pricing on social media platforms were threatening offline markets in South-east Asia’s biggest economy.

Current trade regulations do not specifically cover direct transactions on social media.

“Social media and social commerce cannot be combined,” Deputy Minister of Trade Jerry Sambuaga told Parliament, using the example of sellers using “live” features on the short video platform TikTok to sell goods.

“Revisions to the trade regulations that are currently under way will firmly and explicitly ban this,” Mr Sambuaga said.

TikTok did not immediately respond to Reuters’ request for comment.

TikTok, which has two million sellers in Indonesia, has previously said it had no plans to roll out a cross-border business in Indonesia after officials expressed concerns that the firm’s e-commerce push could flood the country with Chinese products.

Meta’s Facebook, which also has a marketplace feature in its platform, also did not respond to Reuters’ request for comment in an e-mail.

TikTok is owned by Chinese tech giant ByteDance. The company said that its app had 325 million South-east Asian users that were active every month, of whom 125 million were in Indonesia.

The company has said that there were two million small businesses on TikTok Shop in Indonesia.

Indonesia, with a population of more than 270 million people, accounted for nearly US$52 billion (S$71 billion) worth of e-commerce transactions in 2022, according to data from consultancy Momentum Works.

Of that, it said, 5 per cent took place on TikTok, principally through live-streaming.

Indonesia’s e-commerce sector is expected to grow to US$95 billion by 2025, according to a 2022 industry report by Alphabet’s Google, Temasek Holdings and Bain & Company. REUTERS

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