TikTok’s Impact On E-Commerce Worries Jakarta Market Sellers

(CTN News) – While selling his goods on TikTok in Jakarta’s bustling Tanah Abang, the largest textile market in Southeast Asia, 35-year-old Tanjung shouts out to passersby while attempting to make a sale.

It is, however, quieter than usual at the market today, with some stalls closed, and many merchants expressing concern about the impact of TikTok’s growing e-commerce platform on their businesses as a result.

There has been an increase in spending on the Chinese-owned TikTok app since its launch in 2021, with TikTok Shop gaining a significant market share in the region during the first year of its existence.

There has been a rise in concerns among local sellers who rely on offline buyers because of this growth.

A number of people at Tanah Abang, including Tanjung, have voiced their concerns, stating, “We want the government to shut down Shop, or at least regulate it.”

He says he feels bad for his employees, saying that Shop often undercuts the prices of his products, affecting their livelihoods as a result.

Tanjung’s situation has been dire over the past few months, with his daily revenue plummeting over 80 percent in recent months, which has resulted in the layoff of five of his 30 employees as a result of the situation.

There are currently no laws in Indonesia that cover transactions that happen on social media platforms such as TikTok, Facebook, and Instagram.

The Indonesian president, Joko Widodo, has hinted at new regulations that will be applied to social media transactions, in order to address what he sees as monopolistic practices within the sector.

In the opinion of experts, such regulations would level the playing field for local businesses, ensuring that social commerce is on par with e-commerce and traditional retailers as a means of increasing sales.

It has been suggested that as part of these measures, Nailul Huda, a researcher at the Institute for the Development of Economics and Finance, proposes tightening regulations on imported goods and providing incentives to local producers.

Anggini Setiawan, TikTok Indonesia’s head of communications, has defended the role plays in supporting Indonesian businesses and consumers, highlighting that nearly two million local businesses are using TikTok as a service to facilitate social commerce on the platform.

There are 125 million users in Indonesia, which represents 42 percent of TikTok’s regional gross merchandise value (GMV) of $4.4 billion in the previous year, making it the second-largest market with 125 million users.

TikTok has made significant contributions to the retail industry as a whole, but market sellers like Atinah have expressed the need for regulations in order to ensure fair competition, especially as they grapple with the changing retail landscape influenced by TikTok.

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