Trade Minister Engages with Traders After Banning Social Media Companies from E-Commerce Activities

Jakarta, Indonesianpost.com – Trade Minister Zulkifli Hasan paid a visit to the wholesale market Asemka in West Jakarta on Friday to assess the impact of the recent regulation prohibiting social media platforms from conducting e-commerce transactions.

This regulatory action was prompted by reports of declining sales among small and medium-sized businesses in public markets due to what was perceived as “unfair competition” from those using livestream shopping on social media platforms, notably TikTok.

During his visit, Zulkifli was warmly welcomed by shop owners at the market, primarily specializing in cosmetics. Many of them pointed fingers at TikTok’s livestream shopping feature, which offered products at exceptionally low prices, causing difficulties for their businesses.

“It’s called predatory pricing, but we will regulate further to make sure no one is monopolizing trade,” Zulkifli said in response while advising those traders to consider operating virtual shops on established e-commerce platforms.

The Indonesian government had previously cautioned the video-sharing app TikTok against entering the e-commerce realm and facilitating payments on its platform, in violation of TikTok’s license in Indonesia which was intended solely for social media activities.

Earlier this week, the trade minister issued a regulation that bans social media platforms from engaging in e-commerce or live shopping and prohibits e-commerce platforms like Tokopedia, BliBli, or Shopee from acting as producers who sell their brands.

On Thursday, Zulkifli visited Tanah Abang, Southeast Asia’s largest cloth market, where he heard similar complaints from traders.

He highlighted that livestream shopping often involved offering products at prices far lower than those in physical shops to attract as many customers as possible before implementing profit-oriented strategies. This approach has negatively impacted traders in traditional markets who find it difficult to compete.

Social media companies that continue to host livestream shopping will face website takedowns in Indonesia by the Communication and Informatics Ministry, warned Zulkifli.

Anggini Setiawan, a spokesperson for TikTok Indonesia, has said that the company would comply with the trade minister’s regulations. However, she argued that millions of local traders and affiliated content creators relied on TikTok Shop to sell their products.

“We will closely adhere to existing regulations and laws in Indonesia, but we also hope that the government will consider the impact on the six million local traders and nearly seven million affiliated content creators who use TikTok Shop,” Anggini said in a statement on Tuesday.

The dispute between TikTok and the Indonesian government took a new turn on Thursday when Investment Minister Bahlil Lahadalia accused the platform of mobilizing social media influencers to counter the latest regulation.

“I know that TikTok has engaged in a game by mobilizing influencers and also our SMSEs to portray as if they had become victims [of the trade minister regulation]. I ask TikTok to stop this because the company isn’t based in this country,” Bahlil told reporters.

Unlike India, Indonesia “has been nice” to TikTok by not banning its operations here in the first place, he added.

TikTok has not responded to the allegations, which came after a growing number of social media posts criticizing the government over the regulation.