Recently, Indonesia shocked the world when it banned TikTok Shop from operating in its country. The biggest economic force in Southeast Asia banned direct sales on social media platforms last week to protect millions of small businesses. That said, why does this happen?
In case you didn’t know, Indonesia imposed this regulation recently. Interestingly, Indonesia was also the first to pilot the app's e-commerce arm. The country is also the biggest market in the world for TikTok Shop.
Regarding this news, TikTok agreed that it would comply with the new rule. This is a massive setback for the Chinese-owned app. Besides the new ban on TikTok Shop, TikTok is also under pressure in the United States and other nations in recent months over users' data security and the company's alleged ties to Beijing.
Moreover, Indonesian Trade Minister Zulkifli Hasan said that uncooperative firms will be warned first, and subsequently lose their license to operate in Indonesia. On top of that, TikTok Shop Indonesia also issued a statement:
"Our priority is to remain compliant with local laws and regulations, as such, we will no longer facilitate e-commerce transactions in TikTok Shop Indonesia.”
Given that Indonesia offers a huge e-commerce market, it is not surprising for TikTok Shop to capitalise on it. However, this would affect millions of local small businesses. Their presence in the market brings more cons than pros.
We are not sure how this ban will affect Malaysia. But it is interesting to see how the government and those in authority will react. After all, our small local businesses are also at risk.
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