Indonesia bans e-commerce transactions on social media, major blow for TikTok

 JAKARTA: Indonesia has imposed a ban on social media platforms from doubling as e-commerce sites in order to prevent misuse of data, Channel NewsAsia (CNA) reported.

Trade Minister Zulkifli Hasan after a closed meeting on electronic commerce issues said, “(Social media can only (be used to) facilitate the promotion of goods or services (but) direct transactions … (and) direct payments are no longer allowed; (social media) can only be used for promotion.” According to Channel NewsAsia, under the country’s Revised Ministry of Trade Regulation, a minimum import transaction of USD 100 will also be imposed on goods purchased from abroad.

The ban has disappointed buyers, however, the sellers at physical stores in Indonesia have celebrated the move. Moreover, people in Indonesia expressed distress as they lost a cheaper shopping alternative.

Subairi, a factory worker from West java has relied on TikTok Shop for the past two months to buy his daily necessities. But, following the announcement, he is worried over the loss of cheaper alternative, reported Channel NewsAsia.

The 38-year-old Subairi said, “If TikTok Shop is banned, I will find it difficult to find items that are as cheap as (those sold there).”

“On other e-commerce platforms, the service fee is almost 10,000 rupiah (USD0.64) but on TikTok Shop it is totally free, with no conditions,” he added.

Moreover, he emphasized that the flash sales and payday promotions on TikTok Shop, offered at the end of the month make the prices much cheaper, reported Channel NewsAsia.

He has been comparing prices of goods across various e-commerce platforms and found those sold on TikTok Shop to be the cheapest.

“Yesterday, I bought baby formula. Elsewhere, the cheapest price was 320,000 rupiah but on TikTok, with various discounts, I could get (the formula at) around 300,000 rupiah,” said the father of two.

However, another TikTok Shop buyer Nadya Aulia Arma said that although she disagrees with the new rule but will accept the development and switch to using other e-commerce platforms.

“I honestly don’t agree, because I will lose a place to buy things at low prices. But if it’s for the good of the Indonesian people, that’s okay. I will go back to shopping on Shopee,” she said.

A textile seller Iyal Suryadi stressed that the sale of online goods has reduced his income, according to Channel NewsAsia.

“In the local market where we sell our goods, sometimes we only sell one or two pieces of cloth in a week … If it continues like this, don’t even think about growing (the business); just being able to survive is good,” he said. (ANI)

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