Ministry of Cooperatives and SMEs: Tokopedia-TikTok Merger Makes 80 Percent of E-commerce Transactions Controlled by Foreigners

E-commerce (Photo: Unsplash)

JAKARTA - The Ministry of Cooperatives and SMEs revealed the current condition of MSMEs in the country after the merger between Tokopedia and TikTok.

Special Staff of the Minister for Creative Economy Empowerment Fiki Satari said that President Joko Widodo (Jokowi) had ordered the Minister of Cooperatives and SMEs Teten Masduki to do three main things to protect domestic MSMEs. The three things are protection of MSMEs, local platforms and consumers.

Fiki assessed that before the merger with TikTok, Tokopedia was one of the best local platforms at that time. However, he said, when the Ministry of Cooperatives and SMEs discovered the fact that TikTok did not have a permit to operate in Indonesia, it actually had a negative impact on Indonesia.

"It turns out that we found that TikTok did not have a permit after two years of operating in Indonesia. They re-acquired it even though it was regulated by the (Ministry of) Trade. Well, this is a note on how our investment regulations are still very loose regarding e-commerce platforms," ​​said Fiki in a media discussion at the Kemenkop UKM office, Jakarta, Tuesday, August 6.

"So, it can be said from the previous data that our e-commerce transactions of IDR 880 trillion were 54 percent from foreign platforms. After being acquired, it can actually be said that 80 percent of this is from foreign (platforms) in e-commerce," he continued.

According to him, this has an impact on MSME products in the country. This is because the products sold on TikTok are imported goods.

"With products, that is a fact that we still find on TikTok, imported products. Well, on Tokopedia itself we still find (foreign products) too. When we talk about the red and white platform with foreigners, it is different, we continue to communicate and ask for their commitment to clean up," he said.

He regretted that TikTok did not comply with the regulations in Indonesia, namely the Regulation of the Minister of Trade (Permendag) Number 31 of 2023, which requires all platforms to include an official import number if the goods are from abroad.

"But, with so many items being sold, it is difficult for the Ministry of Cooperatives and SMEs to check it alone. We hope that in the future there will be a special committee that is indeed created and the public can report if there is a platform that is found not to follow the rules, it can be given sanctions," he explained.

Meanwhile, Smesco Indonesia President Director Wientor Rah Mada said that the state did not get any benefit at all from the merger.

Wientor said that what is happening now is termination of employment or PHK. At least, he said, there are 450 local employees who have been laid off.

"Our 450 local employees were laid off after Tokopedia was acquired by China. So, the question is, does this acquisition provide benefits? I don't think so far," he added.