This move would further bolster TikTok in expanding its customer base and allow its users can transact directly without third-party payment services.
Heaptalk, Jakarta — Short video platform TikTok is reportedly in the early stages of discussion to obtain a digital payment license with Indonesia’s central bank, the Bank of Indonesia.
This move is part of the company’s further plan, following the previous intentions of the CEO of this short video app, Shou Chew, to disburse an investment worth US$10 billion in Indonesia’s and Southeast Asia’s markets.
If the digital payment license process is accomplished to be obtained, TikTok’s creators and sellers can directly transact without third-party payment services. Also, this plan would put TikTok in direct competition with multiple giant e-commerce platforms in Southeast Asia, such as Shopee and Alibaba’s Lazada.
Currently, TikTok continues to show its popularity in the archipelago. Refers to the latest survey conducted by Telkomsel, this platform has become top of mind for buying and selling services on a social platform. The research revealed that around 76.75% of respondents who shop on the TikTok platform claim to get cheaper prices, 65% of respondents admitted the TikTok shop provides a variety of promos, and 52% of the live shopping models offered are more intuitive.
Home to over 270 million people, Indonesia has contributed to the e-commerce development, with a total transaction in the e-commerce platform attaining US$52 billion. Around 5% of transactions from this output occurred in the TikTok Shop platform.
TikTok has around 125 million monthly users in the country. This result is equivalent to the number of active users in the European market and is only a little below the record number of users in the United States, which has reached 150 million.
Apart from its aggressive efforts to dominate the e-commerce sector, TikTok has also received a deficient response to developing the Project S of TikTok, a platform to trade products originating in China.
With the feature provided and armed with their data, the company can gain valuable insights regarding consumer preferences and the products to be sold. As an effect, numerous stakeholders view the matter could threaten Indonesia’s MSME players.
In response to this issue, TikTok affirmed that the company has never distributed the data of its users to the Chinese government and has taken substantial steps to protect the privacy and security of TikTok users.
Also, as a preventive effort, Indonesia, through the Ministry of Trade, has conducted several strategic endeavors, one of which is revising regulations regarding e-commerce. The points cover the ban on e-commerce being producers, social commerce policies, social commerce transaction taxes, and a ban on selling imported products below US$100.
