Indonesia ("Indonesia") has introduced comprehensive regulations to curb TikTok's growth in Southeast Asia's largest e-commerce sector.。Subsequently, Sea's shares rose a further 5%。

Shopee, owned by Singapore-based Sea, dominates regional e-commerce。This week, after Jakarta officials first proposed "banning social commerce companies from promoting direct e-commerce payments on their platforms," the company's market value has grown by more than 17%, or $3.4 billion.。

Under these conditions, TikTok, the only social media company under ByteDance that sells goods directly on its app, needs to separate its shopping function from its video scrolling business.。Trade Ministry officials said on Wednesday (September 27) that the order is part of the latest tightening of trade regulations, which will take effect immediately and that offending businesses may be forced to stop operating.。

Indonesia is TikTok Shop's first and largest market, and online shopping has become the social media app's fastest-growing feature, expanding within the country's fan base.。TikTok launched its shopping feature in Indonesia in 2021, and its success prompted it to expand its online retail business to other markets such as the United States.。

Thomas Chong, an analyst at Jefferies, said, "In a less competitive market environment like Indonesia, the prospects for Shopee and Tokopedia are more positive.。"

The new rules are designed to ensure that local e-commerce services such as GoTo Group's Tokopedia are not squeezed out of the market, and Indonesia is also seeking to protect MSMEs, which account for 61% of the country's GDP, from social commerce companies.。

After the passage of the new regulations, Indonesia became the first Southeast Asian country to boycott TikTok。Just months after TikTok said it would invest billions of dollars in Southeast Asia, governments around the world are starting to assess what action Southeast Asia's largest nation should take to curb the social media giant's fiery e-commerce business.。Therefore, how to properly handle the conflict with Indonesia is crucial for TikTok。TikTok has faced bans and censorship in the US, Europe and India due to national security concerns.。

TikTok explicitly objects to the proposed rule。The company believes that separating social media and e-commerce will not only hinder platform innovation, but will also put millions of Indonesian merchants and consumers at a disadvantage.。TikTok says some of them are relying on the platform to make a living。

A spokesman for TikTok Indonesia said: "We are deeply concerned by today's announcement, in particular how it will affect the lives of the six million merchants and nearly seven million affiliated creators who use TikTok Shop.。We will respect local laws and regulations and seek a constructive development path.。"

It is reported that TikTok may split the social media and e-commerce business in Indonesia, which may hinder its 1.Conversion of 2.5 billion local reading active users (MAUs) to consumers to benefit Sea-owned Shopee。Shopee, like TikTok Shop, relies on beauty and personal care products for most of its revenue in Indonesia.。

The data shows that in 2023 In August, GoTo-owned Tokopedia has 34 million monthly active users, Shopee 1.3.8 billion, compared to 37 million for Alibaba's Lazada。It's not hard to speculate that Tokopeida could better defend its GMV share in Indonesia, with the home market accounting for 90% of the group's sales in 2022.。