SE is soaring 9% on news that Indonesia's Ministry of Trade will officially ban social commerce tomorrow. The prohibition is contained in the revised Minister of Trade Regulation Number 50 of 2020 concerning Provisions for Business Licensing, Advertising, Development and Supervision of Business Actors in Trading Through Electronic Systems. According to Indonesia's Trade Minister Zulkifli Hasan, "Social commerce can only facilitate the promotion of goods or services; no direct transactions; direct payments are no longer allowed... It can only be used for promotions like TV. TV is allowed for advertising. But TV can't accept money, right? So it's a kind of digital platform." Zulkifli also said that in the revised trade regulation, the government would separate social commerce from e-commerce. This means that there should be no platform like TikTok that can be social media and e-commerce simultaneously. Furthermore, the government will also regulate what imported goods can be sold domestically and must follow the same standards as domestic goods. For example, for food, it must have a halal certificate, for beauty (beauty products) it must have a BPOM (Food and Drug Supervisory Agency) permit. Selling imported, self-operated goods is prohibited. The government will also limit imported products that can be sold on e-commerce to prices above US$100.
Now, #TikTok has to make a difficult decision regarding its social media and e-commerce plans for Indonesia. As for SE's e-commerce arm, Shopee, the platform is relieved to hear about the news targeted at TikTok Shop but it will also have to stop its own shoppertainment elements and is hurt by the new imported goods rules. But more good than bad came out of these new regulations for Shopee. I wrote in early September (SE | TikTok Ban in Indonesia Is Only Way Out) the only way for Shopee to survive is if TikTok Shop is banned.
