Zulkifli Hasan, Indonesia’s Minister of Trade, has revealed that the government is deploying measures to increase control over e-commerce by prohibiting transactions through social media platforms. These platforms, such as social media, will only be allowed for advertising and promotional purposes, while actual transactions will be restricted.
The rationale behind this move is rooted in the fact that social media platforms possess personal user data. To prevent algorithms from exploiting this information for business purposes, it is necessary to separate social media from e-commerce.
Analysts believe that this announcement is aimed at controlling TikTok’s expansion into the e-commerce market in Indonesia. The country is a significant market for the company and has been a target for its previous announcements.
A TikTok representative responded to these measures by highlighting how social commerce was designed to address the challenges faced by local retailers. By partnering with local creators, it aims to boost online sales. The hope is that the impact of these new regulations will be assessed for millions of merchants and creators on TikTok Shop.
Image: Ministry of Trade Indonesia
TLDR: Indonesia’s Minister of Trade has revealed plans to tighten control over e-commerce by prohibiting transactions through social media platforms like TikTok. This is done to safeguard user data and prevent its exploitation by algorithms. TikTok, a major player in Indonesia, states that social commerce is meant to help local retailers and creators boost online sales. The impact of these regulations will be evaluated for millions of merchants and creators on TikTok Shop.