In a significant development, TikTok, the globally popular short video app, has revealed that it is negotiating with Indonesian regulators to secure a payment license. This move is seen as a strategic step to bolster its e-commerce operations in a key market, even as it faces increasing scrutiny in the US and other countries.
TikTok’s CEO, Shou Zi Chew, had announced in June that the platform is committed to investing billions of dollars in Indonesia and the broader Southeast Asia region. Insider sources have confirmed that these discussions involving TikTok, owned by the Chinese tech behemoth ByteDance, and Indonesia’s central bank are progressing positively.
Securing a payment license in Indonesia would greatly benefit TikTok by enabling it to earn transaction fees, propelling it to become a direct competitor against Southeast Asian e-commerce leaders like Shopee and Lazada.
TikTok boasts around 125 million monthly users in Indonesia, matching its European user base and closely trailing its US user count of 150 million. Douyin, ByteDance’s Chinese equivalent of TikTok, had successfully acquired a Chinese payment license in 2020.
Indonesia’s 270 million population contributes significantly to the e-commerce industry. In 2022, the country saw e-commerce transactions worth nearly $52 billion, as reported by Momentum Works consultancy. Remarkably, TikTok accounted for 5% of these transactions, primarily through live-streaming.
Interestingly, TikTok intends to introduce an e-commerce platform to market China-made goods in the US. However, the company informed Reuters that they have no plans to launch this service in Indonesia. There have been concerns among senior Indonesian officials about a potential influx of Chinese imports.
Despite its growth and popularity, TikTok has been subject to increasing scrutiny in the US over fears of Chinese government influence. The platform has been banned on government devices by the White House, several US states, and countries like Australia and Canada. TikTok, on its part, assures that it has taken considerable measures to safeguard the privacy and security of its users.
This news story is based on an article from thestar.com.my.