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TikTok and YouTube are reportedly contemplating following in Meta’s footsteps by seeking e-commerce licenses in Indonesia, as per a report by Reuters.
This development comes after a ban on online shopping through social media platforms imposed by the country’s trade ministry about a month ago.
Reuters quotes sources familiar with the discussions who have revealed that this move is prompted by Indonesia’s aim to safeguard small and midsize traditional retailers and digital marketplaces while ensuring user data protection.
With a population of more than 270 million, Indonesia generated nearly $52 billion in e-commerce transactions last year, according to data from consultancy Momentum Works.
The law was a particular blow to TikTok, which had pledged in June to invest billions of dollars in Southeast Asia, mainly in Indonesia, where it has a base of 125 million users, in a major push to build its e-commerce service TikTok Shop.
The app, owned by Chinese technology giant Bytedance, plans to apply for an e-commerce license and is exploring the best path to do so, three people familiar with the matter told Reuters.
The people said that TikTok is holding talks for potential partnerships with local e-commerce players, including GoTo’s Tokopedia, while building a standalone TikTok Shop app for Indonesia.
Two sources said that until TikTok Shop stopped operations in Indonesia this month, it delivered about 3 million parcels daily in Indonesia.
TikTok said it could neither confirm nor deny it was considering seeking a license. Tokopedia did not immediately respond to requests for comment. Alphabet’s YouTube is also planning to apply for an e-commerce license, two sources said, without specifying the type of permit designed. YouTube was introduced in the U.S. as a shopping service for creators to promote products and brands on the platform.
A spokesperson for the company declined to comment.
TikTok and YouTube’s plans to apply for e-commerce permits in Indonesia have not been previously reported.
Facebook and Instagram owner Meta Platforms applied this month for a type of e-commerce license allowing the promotion of goods on its platforms but no direct e-commerce transactions, said the Indonesian trade ministry’s director general of domestic trade, Isy Karim.
The permit would enable vendors to advertise goods and do market surveys but no in-app transactions, Isy said, adding that Meta is seeking the permit for its Facebook, WhatsApp, and Instagram apps.
Meta did not respond to requests for comment. YouTube and TikTok have yet to approach authorities about applying, Isy said. If TikTok were to be used, he said, it would have to be a domestic company unit.
