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Indonesia to ban goods transactions on social media with new regulations

Indonesia to ban goods transactions on social media with new regulations

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Indonesia is reportedly planning to ban goods transactions on social media with the introduction of new trade regulations, according to the country's deputy minister of trade, Jerry Sambuaga who was speaking at a parliamentary hearing this week. 

At the hearing, Sambuaga said that social media and social commerce cannot be combined, citing the example of sellers using the Live feature on apps such as TikTok in order to sell their goods. These transactions that happen directly over social media are not covered by current trade regulations. 

Don't miss: TikTok Shop faces backlash from ID government over unreleased Project S

Sambuaga reportedly said that the revisions to the trade regulations, which are currently underway, will "firmly" and "explicitly" ban this. 

This comes shortly after the Indonesian government spoke out against Project S or TikTok’s Global Selling Program which is a new e-commerce initiative that enables global merchants to easily sell their products to TikTok users globally through TikTok Shop, said a TikTok representative to MARKETING-INTERACTIVE.

The program will help Chinese merchants sell goods globally and is in its trial phase in the UK with plans to expand the service to the United States this month, according to a report by Reuters.

News of Project S has been met with backlash from the Indonesian government as the report revealed that Indonesia's Minister of Cooperatives and Small and Medium Enterprises Teten Masduki met with TikTok to express concern over its launch that could hurt small businesses.

Special advisor to Masduki also confirmed the minister’s comments to Reuters, emphasising that such a program would put small businesses at a disadvantage against other sellers through predatory pricing.

As a result of the government’s stance against the unreleased initiative, Anggini Setiawan, head of communications, TikTok Indonesia, told Reuters it had made the deliberate decision to not launch the cross-border initiative in Indonesia.

Setiawan highlighted that the current localised TikTok Shop model aims to empower and benefit local sellers rather than to use the platform to become a retailer in Indonesia to compete with MSMEs.

Additionally, a TikTok representative told MARKETING-INTERACTIVE that the company does not plan for the Global Selling Program eCommerce initiative to be available in markets in the SEA region.

Related articles:
Only 16% of Singaporeans shop on social media: Can TikTok Shop break through?
What the removal of IG shop tab says about its commerce priorities
Live 'Shoppertainment': The next big thing in campaigns?

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