Tiktok, YouTube, and Meta will expand the Indonesian e-commerce market

Owing to the Indonesian government’s current prohibition on conducting e-commerce transactions through social media platforms, there are reports suggesting that TikTok, YouTube, and Meta are contemplating obtaining e-commerce licenses within Indonesian territory.

Recent statistical data reveals that the e-commerce market within Indonesia reached a staggering transaction value of $52 billion in 2022, making it a coveted arena for many industry players. Companies including TikTok, YouTube, and Meta have increasingly utilized multimedia as a promotional platform for e-commerce, thereby fostering numerous e-commerce transaction opportunities.

Prior to this, TikTok had already launched an e-commerce transaction service called TikTok Shop, with daily parcel deliveries in Indonesia surpassing three million. Consequently, the potential restrictions imposed by the Indonesian government could significantly hamper its e-commerce service.

According to insider sources, TikTok plans to apply for an e-commerce operational license from the Indonesian government and is in talks for potential collaborations with e-commerce services under Indonesia’s GoTo banner, including Tokopedia. Similarly, YouTube intends to secure an e-commerce operational license, and Meta has also proposed the same, aiming to transform their social platforms directly into e-commerce services.

However, the Indonesian authorities have clarified that the e-commerce operational license merely permits social platform operators to advertise products. Direct e-commerce transactions on their platforms are still prohibited. This implies that even if entities like TikTok, YouTube, and Meta were able to facilitate e-commerce transactions via their platforms, actual transactions would still necessitate the involvement of third-party providers.