Indonesia’s trade minister announced on Wednesday that the country has banned e-commerce transactions on social media platforms such as TikTok and Facebook.
The decision comes just three months after TikTok pledged to invest billions of dollars in Southeast Asia, mainly in Indonesia, over the next few years in an effort to build its e-commerce platform TikTok Shop, Reuters reported.
The Indonesian government said the ban is aimed at protecting offline merchants and marketplaces, adding that predatory pricing on social media platforms is threatening small and medium-sized businesses.
The new regulation also requires e-commerce platforms in Indonesia to set a minimum price of $100 for certain items that are directly purchased from abroad and that all products offered should meet local standards.
A TikTok Indonesia spokesperson said the company was “deeply concerned” with the announcement, “particularly how it would impact the livelihoods of the 6 million” local sellers active on TikTok Shop, the media outlet noted.
E-commerce transactions in Indonesia totaled nearly $52 billion last year and of that, 5% took place on TikTok, according to data from consultancy Momentum Works.
TikTok, which is owned by China’s ByteDance, has 125 million active monthly users in Indonesia.
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