The digital world and social media have become an inseparable part of our lives. Applications such as Facebook, Instagram, X, and TikTok have become communication, entertainment, and business tools for many people. However, amidst the popularity of these applications, questions often arise about their impact on society, especially the younger generation. In Indonesia, one of the hot topics discussed recently is the ban on TikTok Shop, a feature that allows TikTok users to offer and sell products.
The closure of the TikTok Shop was carried out after the revision of the Minister of Trade Regulation (Permendag) Number 50 of 2020 was completed and promulgated in the Minister of Trade Regulation number 31 of 2023. This regulation came into effect on September 26, 2023. In general, the regulation regulates licensing, advertising, coaching, and supervision of business actors in trading through electronic systems.
In Minister of Trade Regulation number 31 of 2023 TikTok with the TikTok Shop service is included in the category of Electronic Trading Providers (PPMSE) or platforms that provide electronic communication facilities for trading transactions. So if you look further, TikTok is an application that not only makes us connect with other people. Furthermore, TikTok can shop directly through the TikTok Shop service. This phenomenon is then called social commerce or the combination of social media services and e-commerce.
Through Minister of Trade Regulation number 31 of 2023, PPMSE with social commerce movements like TikTok has with its TikTok Shop service is limited in its movement. This refers to article 21 verse 3 which reads: “PPMSE with a social commerce business model is prohibited from facilitating payment transactions on its electronic system.”
In response to this, TikTok Indonesia then released a written statement officially stating that the TikTok Shop Indonesia service would cease operations on October 4, 2023. This article will briefly review whether the ban on TikTok Shop in Indonesia is the right step to take or whether there are wiser alternatives.
TikTok Shop: What and How
Before discussing whether TikTok Shop should be banned, we must understand what TikTok Shop is and how it works. TikTok Shop is a feature that allows TikTok users to sell products or services online. In this case, TikTok users can promote their products with short videos or photos. Other users interested in the product can make purchases through the TikTok app itself.
This feature allows many people to run an online business without having to have a physical store or in-depth experience in e-commerce. Of course, this is a great opportunity for small and medium businesses, especially after the COVID-19 pandemic which has limited many people’s ability to interact directly, causing many people to fall into the abyss of business failure.
There are several benefits that can be found in using TikTok Shop, especially for small businesses. Among them: 1. Access to a larger market, TikTok has millions of users in Indonesia. By using TikTok Shop, businesses can access a larger market than they can reach through physical stores or other e-commerce platforms. 2. Creative Promotion, TikTok Shop allows users to create creative content that can attract the attention of potential buyers. Short, interesting videos can be a powerful promotional tool. 3. Ease of Transactions, TikTok Shop allows transactions to occur within the application, making it more convenient for customers. They don’t need to leave the app to shop. 4. Business Development, For many small businesses, TikTok Shop is an opportunity to develop their business without having to spend large amounts of money on renting a physical shop.
However, there are potential threats to its use that need to be considered, some of which are: 1. Potential for Abuse, This feature can be misused by some users who may sell illegal, fake, or harmful products. 2. Impact on Mental Health, TikTok users, especially the younger generation, can be trapped in an unhealthy consumption cycle. Too much time spent on these apps can have a negative impact on mental health. 3. Privacy and Security, TikTok Shop users must provide personal information when shopping. Personal data security becomes a serious problem if not addressed properly. 4. Indications of the existence of Project S, this makes the TikTok Shop algorithm bring up shops from outside Indonesia, especially from China. They then sell at prices that don’t even make sense, so cheap that they damage market prices and domestic shops don’t sell because the prices can’t compete.
Should TikTok Shop Be Banned?
The question that arises is whether TikTok Shop should be completely banned in Indonesia. This prohibition could be extreme, considering that the benefits mentioned above are not small. Instead, a number of steps can be taken to overcome potential problems related to TikTok Shop such as providing strict regulations. With clear regulations, the government can monitor TikTok Shop and ensure that the products sold are legal and safe and of course by not playing and exploiting the algorithm for a few people or groups. Regarding regulations, the government can also work together and establish good relationships to overcome potential problems that have and will arise.
Apart from that, there is nothing wrong with the government establishing an independent monitoring agency to monitor and supervise TikTok Shop and minimize abuse. Lastly, providing massive public education and awareness campaigns regarding the healthy and safe use of applications and social media (not limited to TikTok) must be stepped up. This should be done to increase awareness of the importance of using time for productive things and protecting personal data.
TikTok Shop is a feature that has great potential to help small and medium businesses in Indonesia. However, there are potential problems that need to be considered, especially related to misuse of data and algorithms. Instead, regulatory and educational steps can be taken to ensure that TikTok Shop is used responsibly and safely. Before taking the drastic step of banning this feature, it is important to consider the benefits it provides and try to strike a balance between business freedom and community protection.
