Indonesia to ban items transactions on social media, says deputy commerce minister

Indonesia is planning to ban items transactions on social media below new commerce laws, the deputy commerce minister informed a parliamentary listening to on Tuesday.

Ministers have repeatedly stated that e-commerce sellers utilizing predatory pricing on social media platforms have been threatening offline markets in Southeast Asia’s largest economic system.

Current commerce laws don’t particularly cowl direct transactions on social media.

“Social media and social commerce cannot be combined,” Jerry Sambuaga, deputy minister of commerce, informed the parliament, utilizing the instance of sellers utilizing “live” options on the quick video platform TikTok to promote items.

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

In response, TikTok stated that separating social media and e-commerce into completely different platforms would hamper innovation and it hoped the federal government will present a stage taking part in area for the corporate.

“It would also disadvantage Indonesian merchants and consumers,” TikTok Indonesia spokesperson Anggini Setiawan informed Reuters on Wednesday.

TikTok, which has 2 million sellers in Indonesia, has beforehand stated it had no plans to roll out a cross-border enterprise in Indonesia after officers expressed considerations the agency’s e-commerce push might flood the nation with Chinese merchandise.

Meta’s Facebook, which additionally has a market function in its platform, additionally didn’t reply to Reuters’ request for remark in an e-mail.

TikTok is owned by Chinese tech large ByteDance. The firm stated that its app had 325 million Southeast Asian customers that have been lively each month, of whom 125 million have been in Indonesia. The firm has stated that there have been 2 million small companies on TikTok Shop in Indonesia.

Indonesia, with a inhabitants of greater than 270 million, accounted for practically $52 billion price of e-commerce transactions final 12 months, based on information from consultancy Momentum Works. Of that, 5% came about on TikTok, principally by live-streaming, it stated.

Indonesia’s e-commerce sector is anticipated to develop to $95 billion by 2025, based on a 2022 business report by Alphabet’s Google, Temasek Holdings and Bain & Company.