Short-form video platform TikTok is currently in talks to secure an e-commerce permit from the Indonesian government, the state news agency Antara reported.
The news follows Indonesia’s ban on e-commerce transactions via social media platforms in September, a significant setback for TikTok, as Indonesia is the biggest market for its TikTok shop, with online shopping growing into its most popular feature in the country.
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Indonesia’s curbs aimed to stop its 64.2 million micro, small and medium enterprises from being pushed out by social commerce companies, Bloomberg reported.
TikTok fought against the curbs, claiming that separating e-commerce and social media would disadvantage its customers and merchants in Indonesia.
TikTok Shop is an e-commerce business that is directly integrated into the social media platform.
The e-commerce feature allows creators and merchants to sell products to TikTok users directly, instead of having to direct users to a third-party site.
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By GlobalDataDeputy Trade Minister Jerry Sambuaga, as quoted by Antara on Tuesday, acknowledged TikTok’s previous lack of compliance, stating, “Before, they (TikTok) were not compliant; they didn’t have the permit. Now they are taking care of it.”
Sambuaga noted that TikTok could also explore partnerships with local firms.
TikTok, owned by China’s ByteDance, currently has a user base of 125 million active monthly users in Indonesia, a country with a population exceeding 270 million.
Reuters reported earlier this month that TikTok is actively discussing potential partnerships with various Indonesian e-commerce entities, including GoTo‘s e-commerce unit Tokopedia, Bukalapak.com and Blibli.
The outcome of TikTok’s regulatory endeavours in Indonesia could have far-reaching implications for the platform’s business strategies and expansion plans in the Southeast Asian market.
TikTok has also faced many bans owing to national security concerns and its ownership by the Chinese company ByteDance.
As of June 2023, US federal and state employees in 34 states are barred from accessing the app on government devices.
In May 2023, Montana became the first state to ban TikTok on all personal devices, though this will not take effect until 1 January, 2024, and is currently being challenged in court.
