TikTok, YouTube Eye E-Commerce Licenses in Indonesia Amid Regulatory Changes

TikTok and YouTube are reportedly exploring obtaining e-commerce licenses in Indonesia. This comes after the country's trade ministry banned e-commerce transactions on social media platforms, citing the need to protect local offline merchants, marketplaces, and user data.

TikTok's E-Commerce Ambitions

TikTok, owned by Chinese tech giant Bytedance, had previously disclosed plans to invest billions of dollars in Southeast Asia, with a strong focus on expanding its e-commerce service called TikTok Shop. The app amassed a user base of 125 million in Indonesia, notes Reuters. Now, TikTok is actively exploring avenues to apply for an e-commerce license in the country.

Tech in Asia reported that sources familiar with the matter revealed that TikTok has been in discussions with potential local partners, including GoTo's Tokopedia. Besides seeking partnerships, TikTok is developing a standalone TikTok Shop app exclusively for the Indonesian market. Until recently, TikTok Shop was a prominent distributor, delivering approximately 3 million parcels daily across Indonesia.

While TikTok declined to confirm or deny its interest in obtaining an e-commerce license, Alphabet's YouTube reportedly plans to enter the e-commerce space in Indonesia. However, specific details regarding YouTube's license application have not been disclosed. Notably, YouTube recently introduced a shopping service in the United States, allowing creators to promote products and brands on the platform.

Meta Platforms, the parent company of Facebook and Instagram, has already applied for an e-commerce license in Indonesia. However, this permit only allows the promotion of goods on their platforms and does not facilitate direct e-commerce transactions. Meta is seeking a license for its Facebook, WhatsApp, and Instagram apps.

Impact on Indonesian E-commerce

The Indonesian trade ministry's director general of domestic trade, Isy Karim, clarified that Meta's permit would enable vendors to advertise goods and conduct market surveys within the apps.

However, the license does not permit in-app transactions. This move seeks to strike a fine balance between allowing digital promotion and safeguarding local merchants and their businesses.

Isy stated that YouTube and TikTok had not formally approached the authorities regarding their plans for obtaining e-commerce licenses in Indonesia. If TikTok were to proceed with the application, it would need to establish a domestic unit within the country. This aligns with the Indonesian government's effort to ensure regulatory compliance and foster economic growth.

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