TikTok’s Project S initiative had previously raised concerns within the government, as it was feared that it might disrupt business competition, especially among small and medium-sized enterprises (UMKM). Consequently, the government is preparing to establish two digital task forces.
“We have agreed to form two task forces, namely the digital government and digital economy task forces,” said Minister of Cooperatives and SMEs, Teten Masduki, during a press conference at the AFPI UMKM Digital Summit 2023 in Jakarta on Thursday, September 14th.
The digital economy task force will comprise of the Ministry of Cooperatives and SMEs, the Ministry of Industry, the Ministry of Investment, the Ministry of Trade, and the Ministry of Communication and Information Technology (Kominfo).
This task force will focus on maximizing the economic benefits of Indonesia’s digital sector for domestic businesses, including UMKMs. “Currently, it is dominated by foreign entities,” he stated.
He pointed out that the financial sector is controlled by domestic companies, accounting for 96% of the market, while foreign entities dominate 56% of the e-commerce sector.
This has raised concerns within the government regarding the appropriate solutions, whether through investment policies, trade measures, or exploring digital transformation in different aspects of the economy.
The government has intensified its discussions on e-commerce-related policies following the viral Project S TikTok.
The Project S TikTok first came to light in the United Kingdom when the Financial Times reported it. The Chinese social media platform launched a new feature called “Trendy Beat” in early July.
Products displayed on the “Trendy Beat” feature of TikTok were said to be directly shipped from China, with the sellers registered in Singapore but ultimately owned by the parent company, ByteDance.
Through Project S TikTok Shop, it is alleged that TikTok can gather diverse data on products in high demand or desired by consumers. Subsequently, algorithmic systems are said to guide consumers towards purchasing products owned by the company.