Indonesian SMEs claim TikTok Shop bankrupted them. This problem prompted the government to alter Minister of Trade Regulation Number 50 of 2020 on Licencing, Advertising, Guidance, and Supervision of Business Actors in Electronic Trading This change may reduce TikTok Shop’s ‘toxicity’.
Teten Masduki, Minister of Cooperatives and SMEs, and Zulkifli Hasan, Minister of Trade, are concerned about TikTok Shop in Indonesia. Tanah Abang Market sellers in Central Jakarta are annoyed by the TikTok Shop fad.
TikTok Shop may affect local SMEs with its low prices. Thus, Indonesian retail and marketplace goods cannot compete.
TikTok Shop sellers may sell cross-border goods. This means improperly imported goods are flooding the market.
Project S TikTok ‘Stealing’ Rp428 Trillion from Indonesia
Global topic: Project S TikTok. In Indonesia, TikTok’s deceit has boosted cross-border commerce, reports say.
Minister of Cooperatives and SMEs Teten Masduki claimed 21 million indigenous SMEs have entered the market. Local shops still struggle against imports.
TikTok’s technology can monitor user behaviours to understand Indonesian clients’ demands, added Teten. It may teach Chinese SME producers into Indonesia, which is risky. Therefore, it threatens SMEs. Even with free trade, countries must safeguard SMEs to compete. He addressed at the KPK Building in South Jakarta on Tuesday (11/7).
PKS Faction member of Indonesian House of Representatives Commission VI Amin AK termed Project S TikTok the poison that destroys Indonesian SMEs. He said that China’s social media is benefiting from Indonesia’s vast market.
He claimed TikTok’s decision endangers SMEs. TikTok helps Bamboo Curtain firms by analysing Indonesian client behaviour.
Bank Indonesia reported Rp476.3 trillion in e-commerce transactions in 2022. Rp428.67 trillion, or 90%, went to foreign producers, mostly China “He remarked during the 30th Plenary Meeting of the Indonesian House of Representatives for the 2022-2023 Session in Central Jakarta on Thursday (13/7).
TikTok examines Indonesian customer behaviour and invites Chinese SMEs to produce popular Indonesian goods. Project S constantly promotes and discounts things “Amin said.
TikTok Shop Use
Besides Project S, business owners have attacked TikTok Shop’s social media-e-commerce combination. This relationship may assist TikTok users.
The TikTok app on your phone will immediately display a ‘Shop’ menu in the bottom corner. E-commerce and marketplace systems offer numerous items when clicked.
Prices are sky-high. Hoodies and jackets cost Rp100, bags Rp2,000, and pashminas Rp2,000.
Many TikTok Shop dealers livestream their wares. They’re using smartphones for traditional market trading. Seller gimmicks intrigue viewers, making them remain on the live stream and buy.
TikTok Shop salespeople remark, “Don’t forget to check out, click the yellow cart,” during live broadcasts.
Their live broadcasts feature a ‘yellow cart’ in the lower left corner. An item and price list shows when clicked.
These app buying is like other internet stores. Just insert your name and mailing address before payment.
Tanah Abang Market Sellers Conflict
Some sellers had few customers at Tanah Abang Market on Tuesday (12/9). Soleh, a vendor, said TikTok Shop impacted sales.
He expected 2019 daily earnings of tens of millions. Some days, he has one customer.
Before TikTok, Lazada and Shopee didn’t affect the market. TikTok hurts business “explained Soleh.
KPPU Chairman M. Afif Hasbullah received Tanah Abang Market traders’ complaints from PDIP Faction DPR RI Commission VI Member Darmadi Durianto.
He said TikTok Shop had cut these retailers’ sales by 60%.
Rentals in Tanah Abang Market are practically unsellable. Buyer shortages have driven half out, reducing turnover. E-commerce impacts media, then TikTok Shop. Did KPPU investigate? Predatory pricing—what can be done?” Darmadi was questioned by the KPPU at a working session in Central Jakarta at the Indonesian House of Representatives on Wednesday (13/9).
“And then, how can we stop unfair corporate competition? SMEs in Bandung, Tanah Abang, and Tambora yell. How will the KPPU save it?” Darmadi begged.