The Director General of Domestic Trade at the Ministry of Trade (Kemendag), Isy Karim, has clarified that TikTok Shop is not closed but is currently in the process of reorganization. This statement comes in response to recent reports suggesting the closure of the platform, told Business Today.
Karim explained that TikTok Shop operates with a permit as a Foreign Trade Company Representative Office (KP3A), which restricts it from conducting transactions. Minister of Trade Regulation Number 31 of 2023 outlines specific activities allowed for TikTok Shop, including promotions, market surveys, and consumer protection facilitation.
Addressing the situation at the 5th Indonesia Fintech Summit and Expo 2023 in Jakarta, Karim highlighted that TikTok Shop initially applied for a permit as a social media platform under the Ministry of Communication and Information. However, over time, it evolved into an e-commerce platform falling under the jurisdiction of the Ministry of Trade.
Karim noted that TikTok Shop has the legal option to resume transaction activities by applying for an e-commerce permit. He emphasized that compliance with e-commerce regulations, including the establishment of a business entity in Indonesia, is necessary for such operations.
“Actually, it is legal. Hence, if TikTok Shop wants to carry out transactions, it has to change to e-commerce. For e-commerce, of course, there are requirements that must be met,” explained Karim.
Among the requirements is the establishment of a business entity in Indonesia, which entails obtaining legal status, a tax ID (NPWP), and a Business Identification Number (NIB). Additionally, e-commerce platforms are expected to adhere to regulations, including setting a minimum price for transactions from overseas merchants, subject to specific categories outlined by the latest trade minister’s regulation.
The reorganization process aligns with regulatory guidelines, emphasizing the importance of compliance in the rapidly evolving digital commerce landscape. TikTok Shop’s ongoing efforts to adapt to e-commerce regulations reflect the broader trend of regulatory oversight in the digital marketplace.
Picture from South China Morning Post
