Insider reveals! TikTok may see a turnaround after being banned in Indonesia

TikTok and YouTube are considering joining Meta in applying for e-commerce licenses in Indonesia after Southeast Asia's largest economy banned online shopping on social media platforms, according to people familiar with the matter .

A month ago, Indonesia’s trade ministry banned e-commerce transactions on social media, saying it was aimed at protecting small and medium-sized offline merchants and marketplaces and ensuring user data was protected.

Indonesia, with a population of more than 270 million, generated nearly $52 billion in e-commerce transactions last year, according to consultancy Momentum Works.

The law is a particularly severe blow to TikTok, which in June pledged to invest billions of dollars in Southeast Asia, primarily in Indonesia, to boost its e-commerce service TikTok Shop.

In Indonesia, TikTok has 125 million users.

The short video app is planning to apply for an e-commerce license in Indonesia and is exploring the best path to do so, three people familiar with the matter said .

People familiar with the matter said TikTok is in talks with local e- commerce leaders about potential partnerships and may develop a standalone TikTok Shop application for Indonesia.

Sources said that before TikTok Shop ceased operations in Indonesia this month, the company delivered about 3 million packages a day in Indonesia.

TikTok said it could neither confirm nor deny that it was considering applying for a license.

YouTube, which has launched a shopping service in the United States for creators to promote products and brands on the platform, is also planning to apply for an e-commerce license in Indonesia , two of the sources said, without specifying the type of license it plans to pursue.

Meta, the owner of Facebook and Instagram, this month applied for an e-commerce license that would allow it to promote products on its platforms but not conduct direct e-commerce transactions, said Isy Karim, director general of the domestic trade department at Indonesia 's trade ministry .

Isy Karim said the license would allow vendors to advertise goods and conduct market research, but not conduct in-app transactions.

However , Isy Karim said that YouTube and TikTok have not yet contacted the authorities regarding their applications.

Indonesia

TikTok

E-commerce ban