TikTok And YouTube Want To Apply For An E-Commerce License In Indonesia

JAKARTA - TikTok and YouTube are considering joining Meta in applying for an e-commerce license in Indonesia. This was done after President Joko Widodo banned online shopping applications on social media platforms.

The Indonesian Ministry of Trade banned e-commerce transactions on social media a month ago, saying it wanted to protect small and medium traders and online markets, and ensure user data was protected.

With a population of more than 270 million people, Indonesia generated nearly IDR 827.6 trillion in e-commerce transactions last year, according to data from consultancy Momentum Works.

The law is a particular blow to TikTok, which had pledged in June to invest billions of dollars in Southeast Asia, particularly in Indonesia where the platform has a user base of 125 million, in a major effort to build out its e-commerce service, TikTok. Shop.

The app, owned by Chinese tech giant Bytedance, plans to apply for an e-commerce license and is exploring how best to do so.

TikTok is in talks for potential partnerships with local e-commerce players, including GoTo-owned Tokopedia, while building a standalone TikTok Shop app for Indonesia, sources said.

Until TikTok Shop stopped operations in Indonesia this month, the platform was sending around 3 million packages a day in Indonesia.

TikTok said it could not confirm or deny whether it was considering obtaining a license. Tokopedia also did not immediately respond to a request for comment.

Alphabet-owned YouTube also plans to apply for an e-commerce license, according to two sources, without specifying the type of license planned. YouTube introduced a shopping service for content creators to promote products and brands on the platform in the United States.

However, a company spokesman declined to comment.

TikTok and YouTube's previous plans to apply for an e-commerce permit in Indonesia have not been officially reported until now.

"Meta Platforms, last month applied for a type of e-commerce license that allows the promotion of goods on its platform but there are no direct e-commerce transactions," said the Director General of Domestic Trade at the Indonesian Ministry of Trade, Isy Karim.

"The permit will allow sellers to advertise goods and conduct market surveys but there will be no transactions in the application," said Isy. He added that Meta is seeking permission for its Facebook, WhatsApp and Instagram apps. Meanwhile, Meta did not want to respond to requests for comment from the media.

Isy said that YouTube and TikTok had not contacted the authorities to apply for permits. If TikTok were to file, he said, it would have to be the company's domestic unit.