TikTok states it regrets Indonesia’s final decision to ban e-commerce income on social media platforms

JAKARTA, Indonesia (AP) — Chinese-owned app TikTok on Thursday claimed it regretted the Indonesian government’s selection to ban e-commerce transactions on social media platforms and significantly the affect it would have on the hundreds of thousands of sellers who use TikTok Store.

But TikTok Indonesia claimed in a statement it will respect the restrictions and rules that apply in Indonesia and “will consider a constructive route ahead.”

“We deeply regret the government’s announcement, particularly how it will effect the livelihoods of the 6 million sellers and virtually 7 million affiliate creators who use TikTok Shop,” claimed the assertion despatched to The Associated Press on Thursday.

Indonesia banned products transactions on social media platforms these kinds of as TikTok in a bid to secure small corporations from e-commerce level of competition, accusing them of predatory pricing.

Indonesia’s Trade Minister Zulkifli Hasan on Monday announced the choice just after a assembly with President Joko Widodo. The ban ”is to avert the domination of the algorithm and avoid the use of particular knowledge in enterprise passions,” Hasan instructed a information convention.

Hasan said the ban, which can take effect quickly, aims to “create a truthful, healthful and valuable electronic commerce ecosystem by prohibiting marketplaces and social media sellers from performing as producers and facilitating payment transactions on its digital techniques,” according to a statement introduced by the Trade Ministry on Wednesday. Marketplaces and sellers can only offer you or advertise items and providers, he added.

Throughout an inspection to Southeast Asia’s premier wholesale market Tanah Abang in Jakarta past week, Minister of Cooperatives and Modest and Medium Enterprises Teten Masduki claimed he found that sellers were dealing with a a lot more than 50% decline of income mainly because they could not compete with imported items sold on the internet at significantly reduce charges.

Masduki reported the China-primarily based system has been included in “predatory pricing,” which triggered damages to area tiny- and medium-sized businesses. He said the new regulation “will justly control reasonable trade on the web and offline.”

Minister of Interaction and Informatics Budi Arie emphasized that the regulation is intended for all social commerce platforms, not just TikTok Shop. It could also affect proven, homegrown e-commerce companies like Tokopedia, Lazada and BliBli.

The go came after TikTok CEO Shou Zi Chew pledged at a discussion board it arranged in Jakarta in June that it would invest billions of pounds in Indonesia and Southeast Asia in excess of the up coming handful of many years. He did not offer a detailed breakdown of the investing plan, but explained it would devote in teaching, advertising and supporting compact vendors wanting to join its e-commerce system TikTok Shop.

The approach will come as TikTok, owned by China’s ByteDance, faces scrutiny from some governments and regulators mainly because of problems that Beijing could use the application to harvest user data or progress its pursuits.

International locations like the United States, Britain and New Zealand have banned the app on federal government telephones, irrespective of TikTok repeatedly denying that it has ever shared facts with the Chinese federal government and would not do so if asked.

Southeast Asia, a area dwelling to additional than 675 million people today, is a person of TikTok’s major markets in terms of consumer numbers, making additional than 325 million visitors to the application every month.

TikTok had 8,000 workforce to facilitate $4.4 billion of transactions across the location previous calendar year, up from $600 million in 2021. But it still trailed far guiding Shopee’s $48 billion in regional items revenue in 2022, in accordance to Singapore-centered Momentum Works, a business enterprise advancement company.

In Indonesia, Southeast Asia’s most significant financial state, TikTok has 2 million smaller suppliers promoting their wares on its system.

Muhammad Zidan, a merchant who makes use of TikTok Shop to sell bicycles and components, urged the govt not to depart at the rear of thousands and thousands of vendors who rely on earnings from e-commerce transactions.

“We have large publicity for our items by making use of TikTok Store,” Zidan said. “The authorities must locate a acquire-win answer mainly because we will also experience a great deal of losses. … The ban will have a enormous effect on us.”

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Connected Press journalists Andi Jatmiko and Tatan Syuflana in Jakarta, Indonesia, contributed to this report.