TikTok Will Not Present Cross-Border E-commerce Platform In Indonesia

TikTok CEO Shou ZiChew (photo: tiktok)

JAKARTA - The short video application TikTok stated that it has no plans to present a cross-border business in Indonesia. This was revealed after the government on Thursday 27 July expressed concern about the plan reported to expand the e-commerce business by the company. The reason could result in flooding of products from China to Indonesia.

The short video app owned by ByteDance from China has been working on a program to help bamboo curtain country traders sell goods globally, which has been tested in the UK and is planned to be officially launched to consumers in the United States next month, Reuters reported on Wednesday 26 July.

On Thursday, Indonesia's Minister of Cooperatives and Small and Medium Enterprises, Teten Masduki, said he had met representatives from TikTok and expressed concern that the launch of such a program in his country could harm small businesses, adding that the company had promised not to do so.

Fiki Satari, a special adviser to the Coordinating Minister, confirmed the minister's comments and said they were worried that such a program would increase the risk of "disfair and detrimental pricing" for small businesses.

The attitude of the Indonesian government to make the country in Southeast Asia the first to publicly oppose initiatives that have not been launched by TikTok, as the company seeks to emulate the success of shopping platforms such as Shein and PDD Holdings' Guests in Europe and the United States.

Angini Setiawan, Head of Communications for TikTok Indonesia, said that they have no intention of launching such a platform in Indonesia.

"We have made a conscious decision not to open cross-border businesses here. This is our commitment to support Indonesia's micro, small and local medium enterprises," he said. Indonesia to compete with Indonesian sellers."

TikTok Shop's current model focuses on local services "empowering and providing benefits" to local sellers, and TikTok will continue to follow this approach, he added.

The program called "full serve" by TikTok and that has been reported by another media under the name "Project S" is meant to complement the existing TikTok Shop feature that focuses on helping local traders sell products to local buyers on the TikTok app.

TikTok in recent months has been aggressively attracting Southeast Asia's market for their e-commerce business, with Shou CEO Zi Chew saying last month that the company would invest billions of dollars into the region in the coming years.

TikTok has succeeded in building a large user base in Indonesia. The company says its app has 325 million active users every month in Southeast Asia, with 125 million of them coming from Indonesia. TikTok also stated that there are 2 million small businesses on TikTok Shop on Indonesia