TikTok Shop Closure Gives Rise to Competition in E-Commerce Industry, Says Expert
Editor
8 October 2023 19:01 WIB
TEMPO.CO, Jakarta - Economic expert from the Muhammadiyah University (Unmuh) Jember, Yohanes Gunawan Wibowo, stated that the temporary closure of the TikTok Shop has had a positive impact on the e-commerce ecosystem, which is reflected in the increase in share prices of other e-commerce marketplaces such as Bukalapak and Tokopedia.
"However, this may only be temporary because the digital platform will likely return in a different way," he said in a written statement received in Jember Regency, East Java, Saturday, October 8, 2023.
The government officially closed the TikTok Shop on Wednesday, October 4, 2023 at 17:00 WIB (Indonesian Western Time), which refers to government regulations, Minister of Trade Regulation (Permendag) Number 31 of 2023.
Minister of Trade Regulation Number 50 of 2020 and Minister of Trade Regulation Number 31 of 2023 led to the official closure of the TikTok Shop on the grounds that the social commerce had become a place for promotions, and that transactions were prohibited.
"The closure has given rise to more intense competition in the e-commerce industry and increased sales in e-commerce Facebook Ads and Instagram Ads," he said.
The expert said that the consequences of closing the TikTok Shop would affect business people who rely on it. They must improve their business capabilities both offline and online.
"Overall, TikTok Shop is a clear example of how adaptive management strategies can enable businesses to survive in a rapidly changing, disruptive era," he said.
He considers that TikTok Shop combines entertainment with a shopping experience, thereby using big data analysis to present content that suits consumer preferences and displays products that suit their wishes. That creates a more effective impulse buying phenomenon.
"This shows that TikTok Shop is a serious threat to the e-commerce industry in Indonesia. TikTok Shop has implemented an almost perfect marketing strategy, creating more complex competition in the market," he said.
TikTok has expressed its readiness to comply with government regulations, which may not change its long-term strategy. Even Tiktok has not yet sold its shares to the public, but that could change in the future.
"The government should not only make regulations, but also understand the opportunities that exist in the development of digital technology. A local platform like TikTok could be a positive step," he said.
Yohanes said the importance of the government's role in following developments in digital technology and changes in consumer behavior, and the government needs to support the creation of local platforms like TikTok and assist MSMEs in increasing digital literacy.
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