JAKARTA - Minister of Trade (Mendag) Zulkifli Hasan revealed how TikTok Shop conducts price games.
He said, this platform uses a loss selling scheme or predatory pricing to attract more customers.
Zulhas, as Zulkifli Hasan is familiarly called, believes that the scheme used by TikTok Shop can harm domestic micro, small and medium enterprises (MSMEs).
"So wholesale buy, price IDR 7,000. On online, selling on TikTok sells IDR 4,000. That's called predatory pricing, it's a loss, right," Zulhas said when speaking to traders at Tanah Abang Market, Central Jakarta, Thursday, September 28.
Zulhas said traders on TikTok Shop usually practice the practice for about six months. After the buyer switched to the platform, "continued
The shop owner also said that this made many customers in Tanah Abang switch to online.
If you have found a lot of customers, said Zulhas, the price will be returned to normal.
"Six months (take) customers, all out. After that he raises it to normal prices," he said.
Agreeing with Zulhas, one of the shop owners Dasya Accessories admitted that they lost to competing with traders on the TikTok Shop. He said, the selling price of products on TikTok is much cheaper than in physical stores.
According to him, this cheap price is because these traders import goods directly from abroad. Thus, the price offered can be much cheaper.
"The price, too, is that online goods are directly from importers, right, people on TikTok. So we take the price from importers here, it's much different, they sell cheaper immediately," he said.
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