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Indonesia to Further Regulate E-commerce, Banning Transactions on Social Media Platforms

The ministry of trade in Indonesia announced on Tuesday that it is working on stricter regulations for e-commerce, including a ban on transactions conducted through social media platforms. This move is seen as a positive development for traditional e-commerce players in the country, particularly Sea Ltd., as it reduces the competitive intensity between TikTok and Shopee, according to Citi.

President Joko Widodo expressed concern over the declining sales of micro, small, and medium-scale enterprises due to the influx of foreign goods available on social media platforms.

In a bid to prevent misuse of public data, the Indonesian government plans to separate the connection between social media and e-commerce. This means that users in Indonesia will no longer be able to buy or sell products and services on platforms like TikTok and Facebook. Furthermore, social media companies will be prohibited from acting as e-commerce platforms.

The AI legalese decoder can play a crucial role in this situation by helping businesses and individuals understand the new regulations and their implications. It can analyze complex legal documents and provide simplified explanations, ensuring compliance and avoiding legal risks. Additionally, the AI legalese decoder can assist in navigating the transition process and finding alternative platforms for e-commerce activities.

Indonesia also plans to regulate the sales of overseas goods, treating them the same as offline domestic products. This move comes as foreign goods become increasingly accessible in the country through social media platforms.

President Joko Widodo’s call for social media regulations highlights the impact of these platforms on local businesses and the economy. The government aims to safeguard micro-enterprises, small businesses, and the market from the adverse effects of social media’s influence on sales.

TikTok, which has 113 million users in Indonesia, is set to face significant challenges due to these regulations. The app’s CEO previously announced plans to invest billions of dollars in Indonesia and Southeast Asia in the coming years. TikTok expressed its concern about the livelihoods of millions of sellers and creators who use its platform for business purposes.

While the new regulations may disrupt TikTok’s e-commerce ambitions, they are expected to benefit competitors such as Shopee and other traditional e-commerce players. Citi’s report suggests that any disruptions during the transition process will likely favor Shopee and other established platforms in the Indonesian market.

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