In Jakarta, small traders in Southeast Asia’s largest textile and apparel market are experiencing a gradual decline in the number of customers, which they believe is due to shoppers preferring to buy goods at low prices offered by e-commerce giants such as TikTok.
Among these traders is Hendry Tanjung (35 years old), an Islamic clothing seller, who displays his wares alongside hundreds of other traders at Tanah Abang Market, in the center of the capital.
The market was not crowded, and some shops had their curtains drawn. Small merchants complain that they are being affected by the boom in e-commerce on the TikTok application.
“We want the government to shut down TikTok Shop, or at least regulate it,” Tanjung said. “I am worried about the (future) of my employees.”
Indonesians are among the people who spend the most in the region through the “Tik Tok” application, which was developed by the giant Chinese technology company “ByteDance”.
Last year, purchases from Indonesia accounted for 42 percent of TikTok’s sales of about $4.4 billion (4.1 billion euros) in Southeast Asia, according to Momentum Works, a Singapore-based consultancy.
In the face of these large numbers, Jakarta recently threatened to completely ban trade on TikTok, with the aim of protecting its local merchants.
Indonesian President Joko Widodo announced on Monday the possibility of adopting rules regulating transactions on social media sites to confront the risks of the monopolistic situation of entities such as “Tik Tok.”
At the same time, Hendry Tanjung was forced to take drastic measures. With sales declining by 80 percent in recent months, he laid off five of his thirty employees.
Tanjung explains why his customers flee, saying, “A shirt is negotiated for sale in the market for 60,000 rupees (3.65 euros), but it is sold on the TikTok shopping site for only 40,000 rupees (2.40 euros).
– Rules of the game –
Experts stress the importance of setting rules of the game in order to protect the local market.
“The solution lies in regulating commerce through social media to be compatible with e-commerce and traditional merchants,” said Neelul Al-Huda, a researcher at the Institute of Economic and Financial Development in Jakarta.
He added: “The government must strengthen the protection of local products by tightening regulations on imported products and imposing deterrent measures on imports.”
In response, TikTok warned against such regulation.
“About two million Indonesian companies use TikTok to thrive and grow through commerce on the social networking site,” TikTok’s communications director in Indonesia, Angie Setiawan, told AFP recently.
Indonesia represents a major issue for the Chinese giant, as it is its second largest market, with 125 million users, according to the application.
In June, during a visit to Jakarta, Xu Ziqiu, CEO of ByteDance, which owns TikTok, announced that the group would invest “billions of dollars” in the coming years in Southeast Asia, where TikTok has 325 million users.
Tik Tok is not the only application that allows transactions on its social network. There is also the giant American Meta group on its platforms, Facebook and Instagram
Traders in the vast Tanah Abang market believe that this situation cannot continue.
“We will be satisfied if the government can set rules,” said Atena, a 21-year-old trader who, like many Indonesians, has only one name.
The young woman runs a women’s clothing store and is seeing her sales decline significantly. The huge revenues it generated during some weekends, which amounted to 10 million rupees at best (610 euros), are now just a memory.
“We only make more than 3 million rupees (183 euros), because customers always compare our prices to those they find on TikTok,” she said regretfully.
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