Author’s note: this is special to the International Trade Council’s Digital Commerce Business Council’s presentation of think-pieces on topics in digital commerce. Zennie Abraham is the Chairperson of The Digital Commerce Business Council.
Oakland and Atlanta (Special to ZennieReport.com) – Indonesia’s H.E. Zulkifli Hasan, its Trade Minister, has a new policy that aims to ban what The Guardian news publication calls “goods transactions” on social media platforms as the country “aims to protect small businesses from e-commerce competition”.
But a closer look reveals a possible bias against the video-blogging platform TikTok, and by Indonesia’s top-ranking official Zulkifli Hasan, who has jurisdiction over online commerce matters. Moreover, a close look at his actions shows his words do not match reality and that he may be actually working on behalf of Indonesia’s online shopping platforms.
In “Indonesia bans e-commerce sales on social media platforms like TikTok”, by Agence France-Presse in The Guardian, the report is that “Calls had grown in recent months for a regulation governing social media and e-commerce, with offline sellers seeing their livelihoods threatened by the sale of cheaper products on TikTok Shop and other platforms. Indonesia is one of the world’s biggest markets for TikTok Shop and was the first to pilot the app’s e-commerce arm.”
Why Is Indonesia’s Zulkifli Hasan Taking A Hard Stance On Ecommerce On Social Media Sites?
To understand why Indonesia’s taking a hard-line against ecommerce activity on social media sites, consider this translated-to-english post left by Indonesia’s Trade Minister Zulkifli Hasan on Instagram on September 30,2023 (https://www.instagram.com/zul.hasan/):
Every day my social media is flooded with comments about how quiet the Red Soil Market is.
https://www.instagram.com/zul.hasan/
The government does not stay quiet let the local UMKM roll the mat. That’s why we in Kemendag released Permendag No. 31 Year 2023 for the sake of fair trade.
Yesterday (28/9) I visited Red Soil Market traders to hear first hand their aspirations.
No digital commerce platform is closed, only regulated. As well as the kiosks in Tanah Abang should not add more closed ones. Together we will overcome this.
What Is The Red Soil Market Mr. Hasan Claims To Be Helping?
Mr. Hasan claims that the Pasar Tanah Merah (or Red Soil Market), is quiet but what is the Red Soil Market. This description from Tripadvisor is a good start:
This fair is held every Saturday in the afternoon till Sunset by the Khoai river( which was dry in February when we visited). Located very near the town this mela is also named “ Shanibarer haat” i.e. Saturday fair. In case you have a car there is free parking admist the clean forest. Walk along the road towards the proper fair. But before you do you will come across mostly tribal vendors selling their wares in the road and in a clearing before the fair premises. Most goods are very reasonably priced and there is a good variety of products. You will also see folk artists performing. Also interesting was to see bahurupiyas i.e. people dressed up in different appearances like a monkey etc.Do leave some money for them . You can drink lovely clean lemon tea. The place is quite clean and there is attractive arrangements for seating too. It’s a large fair and would take a while to cover. Overall a very good experience.
So, the Red Soil Market) is a kind of shopping center where visitors can purchase a variety of products. And since that’s the case, it’s not hard to see why the emergence of e-commerce social media would have a negative impact on visitors. It’s suffering the same fate as American shopping centers with respect to Internet-based purchases: fewer and fewer people are shopping outside the home. It started during the COVID-19 Pandemic and the activity has expanded like, well, a virus.
The World Economic Forum turned to American accounting firm Price Waterhouse Cooper, which reports that:
“The consulting and accounting firm’s June 2021 Global Consumer Insights Pulse Survey reports a strong shift to online shopping as people were first confined by lockdowns, and then many continued to work from home. Other trends in this shift towards digital consumption include online shoppers being keen to find the best price, choosing more healthy options and being more eco-friendly by shopping locally where possible. Another significant finding from the report is that consumers do not think they’ll go back to their old ways of shopping once the pandemic is over.”
Banning TikTok And Social Media Will Not Stop The Slowing Of Visits To The Red Soil Market
That apparently is impacting the visitors who would shop at the Red Soil Market. And if that’s the case, banning social media sites will not stop the problem. The reason is that Worldwide consumer exposure to the possibilities of online shopping has opened up a new market for not just platforms that facilitate it, but use of conventional digital communications tools, like email, to advance it.
That fact seems lost on Indonesia’s Trade Minister Zulkifli Hasan. Moreover, it looks like Mr. Hasan has singularly focused on TikTok, only. The question is why?
Indonesia is reportedly TikTok’s largest Southeast Asian market and second-largest global market with 125 million users after the U.S., according to the company. That’s vastly different from YouTube, where India is its largest market, with 467 million users, followed by the United States at 247 million users, then Brazil with 142 million users, and Indonesia comes in fourth with 139 million users.
So, it’s clear that the actions of Indonesia’s Trade Minister Zulkifli Hasan will hurt TikTok, but it’s not going to stop the push toward online shopping. Indeed, it’s only grown.
Indonesia Has 10 Companies That Provide Online Shopping To The Indonesian Population
At present, there are 10 online companies that provide online shopping to the Indonesian population: Tokopedia.com, Shopee.co.id, Bukalapak.com, Lazada.co.id, OLX.co.id, Blibli.com, iPrice.co.id, Traveloka.com, JD.co.id, and Mitula.co.id. Of the group, Tokopedia.com gets 135 million monthly vistors. That puts it on par with TikTok.
Since TikTok and social media sites are the focus of Indonesia’s Trade Minister Zulkifli Hasan’s policy, its fair to ask why just those sites and not the Indonesian-based online shopping sites if the objective is to get people back to the Red Soil Market?
Does The Trade Minister Zulkifli Hasan Just Hate TikTok?
Trade Minister Zulkifli Hasan is clearly Internet savvy: he has his own linktree page (https://linktr.ee/zulkiflihasan), which lists YouTube, Facebook, Instagram, and Twitter page links – but no TikTok page link. But, a causual search reveals a page on TikTok with his name and photo, 18 followers, and not much else. A fake account, perhaps? Whatever the case, the question must be asked: what is the real reason Indonesia’s Trade Minister Zulkifli Hasan has banned TikTok? Is he protecting Indonesia’s online shopping companies, or something else, or both?
Stay tuned.