• The Indonesian government bans TikTok and other social media platforms from direct sales transactions, which may split the commodity trading function
• TikTok ranks second in the Indonesian market in terms of monthly active users and contributes 57% of the Southeast Asian market GMV
• Merchants in TikTok’s Indonesian marketplace are facing transition issues, with some converting themselves into local brands

It is rumoured that TikTok CEO Zhou Shouzi also arrived in Indonesia a few days ago, wanting to actively communicate with the Indonesian government. After all, the Indonesian market is too important for TikTok’s business development.

Data shows that Indonesia is the second largest market for TikTok’s monthly active users, second only to the United States, and the best performer among all of TikTok Shop’s current sites.In 2022, TikTok shop’s GMV in Indonesia reached $2.5 billion, contributing to 57% of the GMV of the entire Southeast Asian market. In the first half of this year, according to FastData’s “TikTok Eco-Development Whitepaper for the First Half of 2023”, Indonesia has the highest number of TikTok stores with sales greater than 10,000, and also has the highest total TikTok bandwagon live streaming time and total viewership.

Now, this ripe fruit is faltering on the branches of TikTok. what is the fate of TikTok in Indonesia, and what is the way out for the 6 million local sellers and nearly 7 million affiliated creators? These are the questions that keep repeating in the minds of many people.

01

Challenges in Indonesia

Why is TikTok’s situation in Indonesia like this? It is important to realize that the Indonesian market has always been a very bright spot in TikTok’s business landscape.

The factors are nothing but local politics and economy.

Politically, Indonesia is approaching a general election, and a ban on TikTok could allow some people to accumulate political capital, for whom opposing TikTok would be tantamount to supporting local offline businesses in Indonesia.

Economically, it is due to the growth of TikTok shops in Indonesia, which has impacted its offline economy.

Teten, Indonesia’s Minister of Cooperatives and Micro, Small and Medium Enterprises (MSME), reportedly inspected the Dana Abang market, Southeast Asia’s largest wholesale center, some time ago, stating that the inspection revealed that local brick-and-mortar sellers were losing more than 50 percent of their profits because they were unable to compete with inexpensive imported products. Some local Indonesian offline merchants also said they could not make money only to switch to online, but lacked the experience to compete with established online marketing teams.

“Indonesia is not as centralized as China’s industrial belt, and the time and cost for its physical merchants to buy goods is sometimes higher than supplying from China.” Uten partner Sam Huang told HuffPost. Their local production and supply capacity is quite a bit less than that of the country, basically the cost of goods sourced locally is higher than at home, and if Chinese merchants are sourcing locally very much it is also for the sake of compliance, as well as to make the transition before the Chinese goods arrive in the warehouse.

“Indonesian consumers are also more price-sensitive, cheap products come in, Indonesia offline chain brands and other physical stores are really hit by the impact of e-commerce.” Huang Sen added.

Political and economic factors add up to make TikTok’s situation in Indonesia more and more delicate. The Indonesian government’s attitude toward TikTok in recent months has also gone back and forth toward hardening.

As early as July, when it was rumored that TikTok’s “Project S” might be introduced to Indonesia, some Indonesian politicians began to express their concern about it, and there were more and more calls for the government to strengthen the regulation of TikTok. Project S is similar to Temu’s fully hosted model, and the product will be priced more competitively.

Soon after, on July 27, Indonesia’s trade ministry announced that it was revising regulations related to online trade, with one rule restricting the minimum price of imported goods on the country’s e-commerce platforms to no less than 1.5 million rupiah (about $100). Meanwhile, Indonesian media said the country’s government is planning to take on social media platforms such as TikTok into

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In January 2015, OnePlus reached exclusive cooperation with Lazada, the largest e-commerce platform in Southeast Asia, to enter the Indonesian market. In 2016, OnePlus decided to withdraw from the Indonesian market and disbanded the OnePlus Indonesian team in June.

The Indonesian government passed a law amendment in 2015, and foreign phone manufacturers must use 30% of locally produced components including hardware and software for 4G smartphone components sold in Indonesia. OnePlus believes that the regulations for importing smartphones in Indonesia are too complicated and therefore decided to exit.

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According to Indonesian Industry Minister Agus Gumiwang Kartasasmita, the program will cover the sale of 200,000 electric motorcycles and 35,900 electric cars, as well as the conversion of 50,000 conventional gasoline vehicles. The amount of the subsidy will be determined based on factors such as battery capacity, range and localization, with purchases of electric motorcycles eligible for a subsidy of Rp 7 million (about RMB 3,173), as will consumers who convert their internal combustion engine motorcycles to electric ones.

In addition, the Indonesian government will provide tax incentives, land lease exemptions, infrastructure support and other incentives for companies that invest in building electric vehicle production facilities in the country.

Indonesian President Joko Widodo (Joko Widodo) said that Indonesia has abundant reserves of key battery metals such as lithium and nickel, as well as a consumer market of more than 270 million, with the potential to develop a completely electric vehicle supply chain.

Leading companies such as Tesla, BYD and Hyundai Motor Company are reportedly close to reaching investment agreements with the Indonesian government. These companies are expected to establish facilities such as battery factories, assembly plants and R&D centres in Indonesia in the coming years.

The post Indonesia declare EV subsidies to attract Tesla, BYD and others appeared first on TechGoing.

Indonesian Transport Minister Budi Karya Sumadi recently set this ambitious goal for the country, according to the New Straits Times.

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The number of motorcycle users in Indonesia is about 133 million. There are about 5 million applications per year, and before the pandemic, the number even reached 10 million. The market is huge and this can be a game changer and accelerate the transformation."

He went on to explain that the increase in the number of electric motorcycles is not only good for the environment but can also help the country reduce its high fuel subsidies.

"We hope that this subsidy will decrease as the number of electric vehicle users increases. We can use the money from fuel subsidies to build this country."

Sumadi laid out three key requirements that, if met, could help jumpstart the switch to electric motorcycles. These requirements include ensuring the production of high-quality electric motorcycle batteries, increasing the number of charging stations or increasing the accessibility of battery exchange stations, and ensuring the quality of motors in electric motorcycles.

In many Asian countries that lack a widely distributed charging infrastructure, battery-swapped electric motorcycles are seen as a viable option.

Battery-swapping giant Gogoro announced last year that it was entering the Indonesian market thanks to a partnership with Gojek.

The post Indonesia plans to put 2 million electric motorcycles on the road in 2025 appeared first on TechGoing.

Indonesian Transport Minister Budi Karya Sumadi said in an interview a few days ago that the government is studying the size and specific mechanism of subsidies, and promised that the new regulations will be a “disruptor” in Indonesia’s auto industry. Regulators are also considering subsidies for retrofitting internal combustion engine vehicles. It is reported that Indonesia’s Ministry of Transport will approach automakers with a presence in the country, including Hyundai Motor and BYD, in hopes of building an electric vehicle ecosystem for the new capital in Borneo.

Indonesian President Joko Widodo has launched a series of electric vehicle policies in recent years. This year the Indonesian government ordered all state government offices to use electric vehicles and asked state utility PLN to expand its network of charging stations to reach its target of 2 million electric motorcycle users and 500,000 electric vehicle users within four years.

The data shows that as of October 3, the number of electric vehicles in Indonesia was 28,188, of which motorcycles accounted for 22,942.

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Indonesia’s communications ministry on Saturday blocked eight unregistered Internet companies, including PayPal, search engine site Yahoo and several game providers such as Steam and Epic Games. The reason is that Indonesia issued new regulations at the end of November 2020 requiring domestic and foreign technology companies to register their licenses with the Ministry of Communication and Information, under which the authorities will be empowered to remove content deemed illegal or disruptive to public order. And the companies failed to complete the registration before the deadline set by the license.

However this move drew strong criticism and protests from internet users. Considering the widespread impact of the suspension of PayPal’s services, PayPal was then temporarily allowed to continue offering its services for five days.

Communications ministry officials argued that the measure was intended to protect Indonesian Internet users and the digital ecosystem, and said authorities would lift the block on the sites if they complied with registration rules.

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