TikTok won’t launch cross-border e-commerce services in Indonesia amid concerns


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TikTok won’t launch cross-border e-commerce services in Indonesia amid concerns

TIKTOK. TikTok Chief Executive Officer Shou Zi Chew attends the launch of TikTok Socio-Economic Impact Report 2023 event at The Ritz Carlton, Pacific Place in Jakarta, Indonesia, June 15, 2023

Ajeng Dinar Ulfiana/Reuters

Indonesia's minister of small and medium enterprises cites concerns that TikTok's e-commerce program to help Chinese merchants sell goods globally via the platform could harm small local businesses

TikTok said it has no plans to roll out a cross-border business in Indonesia as a government minister on Thursday expressed concerns over how reported plans for a new e-commerce push by the firm could flood the country with Chinese products.

The short video app, owned by China’s ByteDance, has been working on a program to help Chinese merchants sell goods globally, which it has been trialing in the UK and plans to officially roll out to consumers in the United States next month, Reuters reported on Wednesday citing a source.

On Thursday, Indonesia’s Minister of Cooperatives and Small and Medium Enterprises Teten Masduki told local media he had met TikTok and expressed concerns that a launch of such a program in the country could hurt small businesses, adding that the company had promised it would not do so.

Fiki Satari, a special advisor to the minister, confirmed the minister’s comments to Reuters and said that they were worried such a program would increase the risk of “unequal playing field and predatory pricing” for small businesses.

The Indonesian government’s stance makes the Southeast Asian country the first to publicly push back against the yet-to-be launched initiative by TikTok, as the company seeks to replicate the success shopping platforms like Shein and PDD Holdings’ Temu have had in Europe and the US.

Anggini Setiawan, Head of Communications, TikTok Indonesia, told Reuters it had no intention to launch such a platform in Indonesia.

“We made a conscious deliberate decision as a company to not open up cross-border business here. This is our commitment to support local Indonesian micro, small and medium-sized businesses,” she said.

“We have no intent to create our own e-commerce product or become a retailer/wholesaler in Indonesia to compete with Indonesian sellers.”

The current localized TikTok Shop model “empowers and benefits” local sellers, and TikTok will continue with this approach, she added.

The program, called “full service” by TikTok and which has been reported by other media to be named “Project S”, is meant to complement TikTok’s existing TikTok Shop feature which focuses on helping local merchants to sell products to local buyers on the TikTok app.

TikTok has in recent months been aggressively courting Southeast Asia for its e-commerce business, with CEO Shou Zi Chew saying last month that the company would invest billions of dollars into the region over the next few years.

TikTok has established a massive user base in Indonesia. The company said that its app has 325 million Southeast Asian users that are active every month while 125 million are in Indonesia. The company has said that there are 2 million small businesses on TikTok Shop in Indonesia. – Rappler.com

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