Indonesia’s imminent “ban” on TikTok Shop

Since earlier this month, the potential ban of social media doing ecommerce in Indonesia has been brewing, and is at the point of boiling over.

A lot of dynamics have evolved since we touched upon this subject, and just yesterday (25 Sept) President Jokowi seems to have thrown his support towards the camp supporting the ban. A draft new regulation could be issued as early as today.

A few thoughts from Jianggan Li, CEO of Momentum Works:

1. Over the last three weeks, support of the ban seemed to be gathering pace. Kominfo (Ministry of Communications and Information Technology) was the lone voice in support of TikTok Shop;
2. It seems that many influential figures were waiting to see how the tide is going before throwing their support to either camp – you do not want to bet on the wrong horse before the elections;
3. In that context, TikTok PR and GR teams seem to be very quiet, which might not be the right strategy. We have not seen meaningful press / public announcements and events to garner public support; neither have we seen a heavyweight of TikTok voice out;
4. There is a campaign on TikTok with the hashtag #kamiumkmditiktok (we TikTok MSMEs) to support TikTok Shop; and we have seen signed letters addressed to President Jokowi in support of TikTok Shop. That seems to be the petition tactic which might work in the West, but its effect in Indonesia is highly doubtful;
5. In contrast, every year Shopee has been voicing their support for Indonesian MSMEs export (check out the specific slides covering this from our recent In Focus event);
6. Banning TikTok Shop could be operationally very messy (and many of our friends say impractical). There are many different permutations of how things can evolve (e.g. a separate ecommerce app, or specific programmes for MSMEs);
7. Regardless of how the ban proceeds (or evolves), TikTok’s vast consumer traffic will continue to be harvested for ecommerce, through TikTok Shop or other means, by TikTok or by other parties;
8. It is not too late for TikTok to engage and turn the tide. They, however, need to be bold (and local).