According to Reuters, TikTok said today that the company will not launch a cross-border e-commerce business in Indonesia to fulfil its commitment to support local micro, small and medium-sized enterprises in Indonesia.
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TikTok has been developing a program to help Chinese merchants sell their goods globally, which has been piloted in the UK and is scheduled to be officially launched to US consumers next month.
Indonesia’s Minister of Small and Medium Enterprises and Cooperatives, Teten Masduki, told local media that he had met with TikTok leaders and expressed concern that launching such a program in the country could hurt small businesses. He also emphasized that TikTok has promised not to do so.
The Indonesian government’s stance makes the country the first to publicly oppose the plan by TikTok, which is trying to replicate the success of shopping platforms like Shein and Pinduoduo’s Temu in Europe and the US.
Anggini Setiawan, TikTok’s head of public relations in Indonesia, said the company has no intention of launching such a platform in the country: “As a responsible company, we made a conscious and deliberate decision not to open up a cross-border business here. This is our commitment to support local micro, small and medium-sized businesses in Indonesia.”
Setiawan added that the current local TikTok Shop model “empowers and benefits local sellers” and that TikTok will continue this practice. The model, which TikTok calls “full-service,” is designed to complement TikTok’s existing e-commerce capabilities by helping local merchants sell their products to local buyers on the TikTok app.
TikTok has built a large user base in Indonesia. The company says its app has 325 million active Southeast Asian users per month, 125 million of which are in Indonesia. In addition, there are 2 million small businesses on TikTok Shop in Indonesia.
