Indonesia is currently planning a ban on goods transactions on social media under new trade regulations. This was revealed by the deputy trade minister at a recent parliamentary hearing.
Despite being Southeast Asia’s largest economy, Indonesian government officials have often communicated their reservations of these tactics. Specifically, the current trend of e-commerce sellers using predatory pricing on social media platforms that can threaten offline markets, Reuters reports.
The current Indonesian trade regulations do not specifically cover direct transactions on social media.
“Social media and social commerce cannot be combined,” Jerry Sambuaga, deputy minister of trade, told the parliament, using the example of sellers using “live” features on the short video platform TikTok to sell goods.
“Revisions to the trade regulations that are currently underway will firmly and explicitly ban this,” Sambuaga was quoted in the news report.
TikTok has since responded to the statement, saying that separating social media and e-commerce into different platforms would hamper innovation and it hoped the government will provide a level playing field for the company.
“It would also disadvantage Indonesian merchants and consumers,” TikTok Indonesia spokesperson Anggini Setiawan told Reuters.
The report also highlighted there are about 2 million TikTok sellers in Indonesia with around 125 million end users. Total population in Indonesia is now more than 270 million. According to the Reuters report, Indonesia’s e-commerce sector is expected to grow to US$95 billion by 2025.
