Indonesia has banned e-commerce transactions on social media platforms, the trade minister said on Wednesday, in a blow to short video app TikTok, which is doubling down on Southeast Asia's biggest economy to boost its e-commerce business.
The government said the move, which takes effect immediately, is aimed at protecting offline merchants and marketplaces, adding that predatory pricing on social media platforms is threatening small and medium-sized enterprises.
The move comes just three months after TikTok pledged to invest billions of dollars in Southeast Asia, mainly in Indonesia, over the next few years in a major push to build its e-commerce platform TikTok Shop.
TikTok, owned by China's ByteDance, has 125 million active monthly users in Indonesia and has been looking to translate the large user base into a major e-commerce revenue source. A TikTok Indonesia spokesperson said it would pursue a constructive path forward and was "deeply concerned" with the announcement.