TikTok Shop Yet to Comply with Indonesian Rules, Says SMEs Minister
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20 February 2024 20:41 WIB
TEMPO.CO, Jakarta - TikTok was found to have violated the Indonesian Trade Minister's Regulation (Permendag) No. 31 of 2023 regarding its TikTok Shop operation, said Minister of Cooperatives and Small and Medium Enterprises (SMEs) Teten Masduki.
“The Cooperatives and SMEs Ministry has conducted technical coordination between ministries and found that TikTok still violates the Trade Minister’s Regulation No. 31 of 2023,” Teten said after a meeting with the Business Competition Supervisory Commission (KPPU) in Jakarta on Monday, February 19.
Social commerce, in which social media companies engage in e-commerce, is banned in Indonesia through the Permendag 31/2023. The Chinese video-sharing platform thus shut down its e-commerce feature, TikTok Shop, on October 4, 2023.
However, TikTok Shop resumed operations after a collaboration with homegrown tech giant PT GoTo Gojek Tokopedia Tbk starting December 12, 2023.
TikTok's Violation
Minister Teten explained that TikTok did not comply with the existing regulations because it still offered digital market services on its social media platform, while the Trade Minister’s Regulation strictly notes that social media and e-commerce services must be run separately.
The Cooperatives and SMEs Ministry is currently waiting for the Trade Ministry to follow up on the violation. “We will wait for the Minister of Trade,” he added.
In an effort to optimize a healthy e-commerce ecosystem in the country, Teten said he had proposed a revision of the Trade Minister’s Regulation No. 31/2023 by adding rules on predatory pricing and a ban on selling below the cost of goods sold (COGS/HPP).
“If there are no restrictions on HPP, MSMEs will definitely be harmed,” Teten argued.
Throughout 2023, Bank Indonesia recorded that the value of trade transactions in e-commerce reached Rp453.75 trillion, which was below the target of Rp474 trillion.
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