TikTok Shop can’t afford to lose Indonesia – now it doesn’t have to

TikTok Shop, the e-commerce arm of TikTok, shut its doors in Indonesia in early October in the face of a sweeping ban on social commerce from Jakarta. However, after over a month of talks, speculations and rumours, it has been reported that TikTok Shop is planning to reopen in the country with the help of local e-commerce platforms.

As early as late last month, there were reports that TikTok was not ready to give up its fastest-growing market. The company has been seeking to reopen its e-commerce wing by negotiating a special license that would allow the promotion and advertising of merchandise but no transactions on the platform. Talks between the Chinese-owned app and local e-commerce platforms were also reported earlier this month. However, nothing was confirmed at the time.

Things changed on Friday 17th of November, when Temmy Satya Permana, Assistant Deputy for SME Financing and Investment of Indonesia’s Ministry of Cooperatives and SMEs confirmed TikTok’s plans. Temmy also confirmed that the reopened TikTok Shop will comply with all regulations in the country. He did not comment on rumours but did express that it is likely TikTok will have to partner with another e-commerce platform.

With 4.4 billion USD, Indonesia represented 42% of TikTok Shop’s GMV in 2022 and was on track to reach 6 billion this year before the ban. The impact of closing would have been immense. In this sense, TikTok Shop’s reopening was expected, but it’s the when and how that keep the pundits guessing.


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