TikTok won’t launch cross-border e-commerce services in Indonesia amid concerns

JAKARTA/HONG KONG - TikTok said it has no plans to roll out a cross-border business in Indonesia as a minister on Thursday expressed concerns over how reported plans for a new e-commerce push by the firm could flood the country with Chinese products.

The short video app, owned by China’s ByteDance, has been working on a programme to help Chinese merchants sell goods globally, which it has been trialling in Britain and plans to officially roll out to consumers in the United States in August, Reuters reported on Wednesday citing a source.

On Thursday, Indonesia’s Minister of Cooperatives and Small and Medium Enterprises Teten Masduki told local media he had met TikTok and expressed concerns that a launch of such a programme in the country could hurt small businesses, adding that the company had promised it would not do so.

Mr Fiki Satari, a special adviser to the minister, confirmed the minister’s comments to Reuters and said that they were worried such a programme would increase the risk of “unequal playing field and predatory pricing” for small businesses.

The Indonesian government’s stance makes the South-east Asian country the first to publicly push back against the yet-to-be launched initiative by TikTok, as the company seeks to replicate the success shopping platforms like Shein and PDD Holdings’ Temu have had in Europe and the US.

Ms Anggini Setiawan, head of communications, TikTok Indonesia, told Reuters it had no intention to launch such a platform in Indonesia.

“We made a conscious, deliberate decision as a company to not open up cross-border business here. This is our commitment to support local Indonesian micro, small and medium-sized businesses,” she said.

“We have no intent to create our own e-commerce product or become a retailer/wholesaler in Indonesia to compete with Indonesian sellers.”

The current localised TikTok Shop model “empowers and benefits” local sellers, and TikTok will continue with this approach, she added.

The programme, called “full service” by TikTok and which has been reported by other media to be named “Project S”, is meant to complement TikTok’s existing TikTok Shop feature which focuses on helping local merchants to sell products to local buyers on the TikTok app.

TikTok has in recent months been

aggressively courting South-east Asia for its e-commerce business,

with chief executive Chew Shou Zi saying in June that the company would invest billions of dollars into the region over the next few years.

TikTok has established a massive user base in Indonesia. The company said that its app has 325 million South-east Asian users that are active every month, while 125 million are in Indonesia. The company has said that there are two million small businesses on TikTok Shop in Indonesia. REUTERS