Indonesian President Widodo Says Social Commerce Harms MSMEs, Conventional Markets

Indonesian President Joko Widodo, popularly known as Jokowi, raised concerns regarding the influence of social commerce platforms like TikTok Shop on the operations and sales of micro, small, and medium enterprises (MSMEs) and traditional market merchants.

He opined that platforms like TikTok should stick to their primary function of social media rather than delve into e-commerce.

During his visit to a road repair project in North Penajam Paser District, East Kalimantan, President Jokowi stated:

This move into social commerce has affected the production of MSMEs and conventional markets. TikTok is meant to be a medium for social interactions, not economic ones.

Addressing the rising concerns, the president informed that the government is in the advanced stages of drafting a regulation aimed at overseeing trade activities on social media platforms.

This step is intended to moderate price competition and offer protection to MSMEs and conventional market merchants from unfair competition.

The proposed regulation will focus on the management of business activities on social commerce platforms, which blend the capabilities of e-commerce and social media.

Jokowi indicated that this regulation is a collaborative effort across several ministries, with the Ministry of Trade poised for its final approval. He said, “The regulation is now awaiting the green light from the Trade Ministry. Everything else is in place.”

On the same matter, the Trade Ministry’s Director General of Domestic Trade, Isy Karim, disclosed that specifics related to business operations on social media platforms will be integrated into the revised version of the Trade Minister’s Regulation No.50 of 2020.

This regulation currently directs trade activities on electronic systems.

In a reassurance to the business community and the general public, the Trade Ministry clarified that they have no intentions of imposing a ban on TikTok Shop.

Instead, the objective is to regulate its operations, ensuring a level playing field and fostering a business environment that is equitable for all stakeholders.

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