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On October 4th, TikTok halted its online operation in Indonesia after the Indonesian government banned e-Commerce transactions on social media platforms. On Sept. 28th the Indonesian government announced this new regulation to protect small business from e-commerce penetration and accusing the popular ecommerce apps and website of predatory pricing.
Social commerce can place ads like TV, but it mustn’t be transactional, they can’t directly sell,” said Indonesia’s Trade Minister Zulkifli Hasan.
With 125 million users, Indonesia is TikTok's second-largest global market after the United States.
On December 11th, TikTok announced a $1.5 billion investment in GoTo in a deal that would allow the Chinese-owned short video app to restart its online shop in Indonesia.
It is now set to resume that business in Indonesia – one of TikTok's largest e-commerce markets – under a deal with GoTo, which owns the popular local online shopping platform Tokopedia. As part of the agreement, Tokopedia and TikTok Shop Indonesia's businesses will be combined under the existing PT Tokopedia entity.
GoTo said the partnership will roll out with a pilot under the supervision of regulators, and that it expects the deal to close in 2024.
Indonesia's e-commerce market has been dominated for years by platforms such as Tokopedia, Shopee and Lazada but TikTok Shop has gained a significant market share since launching in 2021.
According to Google e-eConomy SEA Report, the Indonesian eCommerce market was worth $59 billion in 2022, an increase of 22% from the previous year.
Southeast Asia, a region with a population of over 675 million, is a major market for TikTok, with more than 325 million monthly active users. TikTok Shop had a market share of 12-15% in Indonesia.
