How TikTok saved Indonesia’s e-commerce business

A year ago, TikTok’s e-commerce business in Indonesia was booming. TikTok had become a global phenomenon with its viral videos, and it was turning its influence into a powerful new source of income by allowing users to buy and sell items while their videos played.

Indonesia is a key market and was the first place TikTok rolled out this feature. The app, owned by Chinese tech giant ByteDance, had about 130 million users, about the same number of users in the United States. Since launching here in 2021, TikTok Shop has become one of the most popular places for Indonesians to buy things online.

Then one day, TikTok announced that it would remove shops from its app in Indonesia. the government declared Social media platforms will no longer be able to process online payments. TikTok was forced to abruptly halt its e-commerce business.

Some Indonesian officials argued that TikTok was so popular that it threatened to dominate online shopping, while others said it did not have the proper license. TikTok industry advocates said the government was acting on behalf of TikTok’s competitors in Indonesia.

TikTok was not named in the government’s proclamation. There was no need for that. No other app combines social media and e-commerce like TikTok.