How TikTok Saved Its E-Commerce Business in Indonesia

A year ago, TikTok’s e-commerce business in Indonesia was thriving. With its viral videos, TikTok had become a worldwide phenomenon, and it was translating its influence into a powerful new revenue stream by letting users buy and sell things while its videos played.

Indonesia was a critical market and the first place where TikTok rolled out this feature. The app, owned by the Chinese tech giant ByteDance, had about 130 million users, nearly as many as it had in the United States. Since its launch here in 2021, TikTok Shop had become one of the most popular places for Indonesians to buy things online.

Then one day, TikTok said it was removing Shop from its app in Indonesia. The government declaredthat social media platforms would no longer be allowed to process online payments. TikTok was forced to abruptly halt its e-commerce operations.

Some Indonesian officials argued that TikTok was so popular it threatened to monopolize online shopping, while others said it didn’t have the right license. TikTok’s defenders in the industry said the government was acting on behalf of TikTok’s competitors in Indonesia.

The government’s edict did not name TikTok. It didn’t need to. No other app blended social media and e-commerce the way TikTok did.