TikTok Indonesia has announced that it will no longer facilitate e-commerce transactions on its platform in order to comply with new local regulations. This decision comes after the Indonesian government imposed a one-week deadline for TikTok to become a standalone app without any e-commerce features, or face being shut down. TikTok stated that its priority is to remain compliant with local laws and regulations and will continue to cooperate with authorities on the way forward. This move could significantly impact TikTok’s Southeast Asian ambitions, as Indonesia is its largest market in the region and second-largest globally.
Indonesia’s President Joko Widodo recently called for social media regulations due to concerns that foreign imports flooding the market through platforms like TikTok have contributed to a decline in sales for domestic businesses. Last week, the Indonesian government banned e-commerce transactions on social media platforms, including TikTok and Facebook. CEO of TikTok, Shou Zi Chew, had previously announced plans to invest billions of dollars in the Southeast Asian region to diversify its business globally. However, operating as a standalone app may prove challenging for TikTok, as most purchases on the platform are impulse buys, and requiring users to log into a separate app may lead to a significant drop-out rate.
