Indonesia may issue a regulation on the use of social media to sell goods in the country, President Joko Widodo said, a move aimed to quell threats to offline markets in the country, Reuters reported on Monday.

Ministers have repeatedly said that e-commerce sellers using predatory pricing on social media platforms are threatening offline markets in Indonesia, with some officials specifically citing the video platform TikTok as an example.

“We just … decided on the use of social media for e-commerce. Tomorrow (Tuesday) it will perhaps come out,” Widodo said in a streamed video address on Monday.

“What the people are expecting is that the advancement of technology can create new economic potential, not kill existing economies,” he said.

The president did not mention any specific companies or offer further details on the regulation, which is being formulated by the trade ministry.

Current trade regulations do not specifically cover direct transactions on social media, according to the report.

Deputy Trade Minister Jerry Sambuaga earlier this month said that “social media and social commerce cannot be combined,” vowing to ban the mix of the two, citing TikTok’s “live” features that allow people to sell goods.

A TikTok Indonesia spokesperson told Reuters on Monday said that social commerce was important for local sellers and helps connect them with local creators who can direct traffic to their online shops.

“While we respect local laws and regulations, we hope that the regulations take into account its impact on the livelihoods of more than 6 million sellers and close to 7 million affiliate creators who use TikTok Shop,” the spokesperson said, referring to TikTok’s shopping platform.

The company said that its app had 325 million Southeast Asian users that were active every month, of whom 125 million were in Indonesia.
Earlier in June, TikTok, owned by China’s ByteDance, announced it would invest billions of dollars in Southeast Asia over the next few years, as it doubles down on the region.

Southeast Asia, a region with a collective population of 630 million – half of them under 30 – is one of TikTok’s biggest markets in terms of user numbers, generating more than 325 million visitors to the app every month.

But the platform has yet to translate the large user base into a major e-commerce revenue source in the region as it faces fierce competition from bigger rivals of Sea’s Shopee, Alibaba’s Lazada and GoTo’s Tokopedia, Reuters said then.

“We’re going to invest billions of dollars in Indonesia and Southeast Asia over the next few years,” TikTok CEO Shou Zi Chew said at a forum it organised in Jakarta.

TikTok did not provide a detailed breakdown of the spending plan, but said it would invest in training, advertising and supporting small vendors looking to join its e-commerce platform TikTok Shop.

Chew said content on its platform was becoming more diversified as it adds more users and expands beyond advertising into e-commerce, allowing consumers to purchase goods through links on the app during livestreaming.

Indonesia has overturned its ban on Chinese video app Tik Tok in July 2018 after it agreed to censor “negative content”, according to earlier reports.

Access to TikTok was blocked on July 3, 2018 by authorities in Indonesia, home to the world’s biggest Muslim population, for featuring content deemed pornographic and blasphemous.

Ministry of Communications spokesperson Noor Iza told Reuters the app was unblocked by the government.

According to communications ministry letter seen by Reuters, the ban was overturned after Tik Tok agreed to clear “all negative content” from the app and open an office in Indonesia to liaise with the government over content.

The letter also said that Tik Tok had agreed to increase the security mechanisms of the app and put additional restrictions on users aged 14-18 years, according to Reuters’ reported dated July 11, 2018.

ByteDance’s TikTok to invest ‘billions’ in Southeast Asia, says CEO