TikTok and YouTube Consider E-commerce Licenses in Indonesia with Meta

According to Reuters, TikTok and YouTube are reportedly considering applying for e-commerce licenses in Indonesia in collaboration with Meta, following the Indonesian government's ban on e-commerce transactions on social media platforms.

The Indonesian Ministry of Trade had imposed a ban on e-commerce transactions on social media platforms a month ago, stating that it aimed to protect small and medium-sized offline businesses, as well as ensure the protection of user data.

According to consulting firm Momentum Works, Indonesia has a population of over 270 million, and the e-commerce transaction volume reached nearly $52 billion last year.

This law poses a significant blow to TikTok, as the company had previously pledged to invest billions of dollars in Southeast Asia, particularly in Indonesia, which has 125 million users, to promote the establishment of its e-commerce service, TikTok Shop.

Three informed sources revealed that TikTok is planning to apply for an e-commerce license and is exploring the best approach to do so. The sources mentioned that TikTok is in negotiations with local e-commerce companies, including Tokopedia under GoTo, for potential partnership agreements. At the same time, TikTok is working on developing a dedicated TikTok Shop application for Indonesia.

Until TikTok Shop ceased operations in Indonesia earlier this month, the company was delivering approximately three million packages per day in the country. TikTok stated that it cannot confirm or deny its consideration of seeking a license at this time.

Two sources also mentioned that YouTube, which is owned by Alphabet, plans to apply for an e-commerce license as well, although there are no specific details regarding the type of license being pursued. YouTube has introduced a shopping service in the United States, allowing creators to promote products and brands on the platform.

It is worth noting that Meta has applied for an e-commerce license this month, which permits the promotion of goods on its platform but does not allow direct e-commerce transactions.

Isy Karim, the Director-General of Domestic Trade at the Indonesian Ministry of Trade, stated that this license would enable suppliers to advertise their products and conduct market research, but it does not allow in-app transactions. He added that Meta is seeking licenses for its Facebook, WhatsApp, and Instagram applications.

The potential collaboration between TikTok, YouTube, and Meta, along with their pursuit of e-commerce licenses, reflects their efforts to adapt to the Indonesian government's regulations while also capitalizing on the country's booming e-commerce market.