TikTok is still violating Indonesia’s rule that bans in-app transactions, a cabinet minister said on Tuesday (20 February, 2024).

In a move to safeguard smaller merchants and user data, Indonesia prohibited in-app transactions on social media, leading to the closure of TikTok’s e-commerce service, TikTok Shop, last year.

The acquisition of a 75.01% stake in Tokopedia by TikTok’s parent company ByteDance for $840m last month marked the return of the short video platform to e-commerce.

Patrick Walujo, CEO of Tolopedia’s parent company GoTo, previously said the deal will bring benefits to Indonesia and its micro, small and medium enterprise.

However, Teten Masduki, the Indonesian Minister for Small-Medium Enterprises (SMEs), who had previously voiced reservations about TikTok Shop, emphasised that the platform remains non-compliant with existing regulations.

He urged the Trade Minister to reprimand TikTok, stating that non-compliance could undermine the government’s authority.

The Ministry of Trade is currently deliberating the most appropriate course of action in response to this regulatory breach.

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The e-commerce market in Indonesia is continuing to grow at a rapid pace. The value of e-commerce sales in the country is expected to hit $44bn in 2024, according to Indonesia’s central bank. 

In Southeast Asia, the value of merchandise sold through TikTok Shop reached $4.4bn in 2022, according to research company GlobalData’s Thematic Intelligence: e-commerce report 2023.