TEMPO.CO, Jakarta - Nailul Huda, an economist with the Institute for Development of Economics and Finance (Indef), said that banning Tiktok Shop will impede the process of MSMEs digitalization.

According to the BPS, she said, there are four platforms that MSMEs often use to sell online. The most popular platforms are instant messengers, followed by social media, e-commerce or marketplace, and finally websites.

"This means that social media plays an important role in the process of digitizing MSME sales with the second largest number," she told Tempo on September 18.

These platforms also illustrate the steps needed by MSMEs to go digital. Starting with personal messaging, MSME actors can then move to social media like Facebook, Instagram or Tiktok. After gaining clout and recognition, they can enter e-commerce platforms or marketplaces before eventually setting up their own websites.

"Thus, if social media is prohibited for selling, it will cut off one step for MSMEs to go digital, and it would be a step back from the government," she said.

Nailul suggested that the government regulate social commerce platforms, including as Tiktok Shop, so they are on par with e-commerce or offline traders—creating an equal playing field between sales actors. She also suggested protecting local products by tightening import, "and providing disincentives for imported products, as well as incentives for local products."

Meanwhile, the government is divided on the issue. Cooperative and SME Minister Teten Masduki said that the onslaught of social commerce such as TikTok Shop is to blame for the lack of buyers' interest in MSME products. Teten said social commerce is dangerous because imported goods are too cheap and it is easy to enter Indonesia through social commerce.

Meanwhile, Minister of Tourism and Creative Economy Sandiaga Uno disagrees with banning Tiktok Shop. He said that many MSMEs were helped to sell their products on the platform. Sandiaga said that some MSME trainings actually encourage actors to make use of social media, including Tiktok.

AMELIA RAHIMA SARI | RIANI SANUSI PUTRI

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