In a recent update on Tuesday, a cabinet minister in Indonesia revealed that the popular Chinese short video app, TikTok, is still in violation of Indonesia’s ban on in-app transactions. This announcement follows after TikTok took control of Tokopedia, Indonesia’s largest e-commerce platform, with plans to relaunch its online shopping business. This move was made after TikTok had to shut down its e-commerce service, TikTok Shop, due to the country’s prohibition on online shopping on social media platforms. The ban was put in place to protect smaller merchants and user data. This news comes after Indonesian tech conglomerate GoTo announced that TikTok had sealed a deal to acquire 75.01% of Tokopedia for a staggering $840 million in December.
Teten Masduki, Indonesia’s Minister for Small-Medium Enterprises (SMEs), previously criticized TikTok Shop and has stated that TikTok has not yet complied with the regulation. He went on to say, “The trade minister has to reprimand TikTok so that it complies with the regulation, if not then … the government’s authority is undermined.” This situation raises concerns about the compliance of foreign tech companies with local regulations and the need for stricter enforcement by the Indonesian government.
In response to the situation, a representative for TikTok in Indonesia did not provide an immediate comment to a request from Reuters. The trade ministry is currently reviewing how best to address the issue, indicating that resolving this matter is a top priority for the Indonesian government.
Last year, TikTok expressed its intention to invest billions of dollars in Southeast Asia, including Indonesia, the largest economy in the region. This move by TikTok to acquire a majority stake in Tokopedia reflects their commitment to expanding their presence in the Indonesian market, especially in the e-commerce sector. However, the violation of local regulations could potentially hinder their plans for growth in the country.
In conclusion, the acquisition of Tokopedia by TikTok highlights the increasing influence of Chinese tech companies in the Southeast Asian market. However, the situation also brings attention to the need for greater compliance with local regulations and the importance of government oversight to protect the interests of smaller merchants and user data in the e-commerce sector.
Opinion:
The acquisition of Tokopedia by TikTok raises important questions about the regulation of foreign tech companies in Indonesia. While it is beneficial to have foreign investment in the Indonesian market, it is crucial for these companies to comply with local regulations to ensure the protection of local businesses and user data. The Indonesian government should prioritize the enforcement of these regulations to maintain a fair and competitive e-commerce landscape. At the same time, TikTok should work closely with Indonesian authorities to address these concerns and demonstrate their commitment to operating responsibly in the country.