Indonesia is gearing up to implement regulations aimed at governing the use of social media for e-commerce, with President Joko Widodo indicating that the move may be announced as soon as September 26. The objective behind this regulatory effort is to address concerns about the impact of online commerce, particularly on the offline market in the country.
Government officials have voiced concerns over predatory pricing practices by online merchants on social media platforms, which pose a threat to traditional brick-and-mortar businesses in Indonesia. Specific platforms like TikTok have been cited as examples of this trend.
President Widodo, speaking during a live video broadcast on September 25, disclosed, “We have just decided on the use of social media for e-commerce. This may be announced by tomorrow.”
However, the President did not provide details about the specific regulations or mention any particular companies that might be affected by these measures. The responsibility for formulating and implementing these regulations falls under the purview of the Ministry of Trade.
It’s worth noting that Indonesia’s current trade regulations do not explicitly cover direct transactions conducted through social media channels.
Jerry Sambuaka, Indonesia’s Deputy Minister of Trade, emphasized earlier this month that there would be a clear demarcation between social media and social commerce. He pledged that these two realms would not be blended. Sambuaka illustrated this distinction by highlighting TikTok’s “live” feature, which enables individuals to sell products, as an example.
The forthcoming regulations are part of Indonesia’s efforts to balance the growth of e-commerce with safeguarding traditional markets and ensuring fair competition within the country’s retail sector.