In a recent statement, an Indonesian cabinet minister highlighted ongoing violations by TikTok of the country’s ban on in-app transactions. The issue surfaces as TikTok acquired a significant stake in Indonesia’s largest e-commerce platform, aiming to rejuvenate its online shopping business within the region.
Previously, TikTok had to shut down its e-commerce service, TikTok Shop, in Indonesia following a government-imposed ban aimed at safeguarding smaller merchants and securing user data. This regulation effectively halted online shopping activities through social media platforms.
Despite these restrictions, TikTok, under the ownership of China’s ByteDance, proceeded to secure a majority stake of 75.01% in Tokopedia, Indonesia’s leading e-commerce entity, with a deal valued at $840 million.
Teten Masduki, the Indonesian Minister for Small-Medium Enterprises (SMEs), expressed concerns over TikTok’s non-compliance with the local regulations. This stance follows his prior criticisms of TikTok Shop’s operations in the country.
The Indonesian trade ministry is currently deliberating on an appropriate response to TikTok’s actions. Despite the ongoing dispute, TikTok had previously announced plans to invest heavily in Southeast Asia, particularly in Indonesia, which stands as the region’s largest economy.
The situation highlights the complexities and challenges of regulating digital platforms and e-commerce within the fast-evolving internet economy, especially in markets as significant as Indonesia.
