The government's decision to ban the use of TikTok Shop as a sales platform is often cited as a consequence of protests by traders in the Tanah Abang area of Jakarta. However, the Indonesian e-Commerce Association (ideA) disagrees with this interpretation. In a Focus Group Discussion held on Wednesday, September 27, 2023, Mohammad Rosihan, the Chairman of the Business and Development Division at ideA, stated that TikTok Shop is not the sole reason for the decline in merchants' revenue in Tanah Abang.

A significant contributing factor is the change in the purchasing power of the public. According to Rosihan, many entrepreneurs have reported a decline in wholesale purchase values. This trend is widespread across various regions, making it impractical for small businesses in these areas to travel to Tanah Abang.

In the same FGD, some sellers acknowledged that local clothing products they sell are highly popular on TikTok Shop, allowing them to continue earning income. The modest profit margins are compensated by the volume of orders they receive.

The government itself is in the final stages of finalizing rules for social commerce and is prohibiting social media platforms like TikTok from serving as sales platforms. Their use will be limited to promoting goods and services. Separating social media from social commerce is also expected to create a more balanced algorithm that is not dominated by a single platform. Additionally, these rules aim to prevent the use of personal data by specific platforms.

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