Commerce War between META / Facebook, ByteDance / Douyin TikTok Shop and X / Twitter

San Francisco 1.17am

Pak / Mister Minister UMKM Teten Masduki posted in his instagram about TikTok Shop around 7am Jakarta or 8am Singapore, assume he’s posted very early before ceremony of Indonesia military anniversary

[limited-in-person meeting, Friday morning, Oct 6th, 2023, around 7-8am Jakarta time / 8-9am Singapore time, about limiting imported product.

Very limited-person meeting about imported products, just in the middle of e-commerce competition in Indonesia. Friday morning, not yet reported by every media in Indonesia, just because posted in Instagram by telco minister Budi Arie Setiadi [was announced Starlink authorized to sell retail schemes/business-to-consumer in Indonesia], he posted [hours ago] a limited meeting in the Presidential Palace. President Jokowi even not yet posted this meeting in his social media. 

Trackback again, this Friday morning meeting just around 34-35 hours after Shopee,  a subsidiary company of SEA Limited, decided [10pm Jakarta time, Oct 4th] cross-border Sellers are strictly prohibited. And just 39-40 hours after ByteDance, a parent company of TikTok, removed ‘YELLOW BUCKET’ [KERANJANG KUNING] icon in TikTok apps [5pm Jakarta time, Oct 4th], a sign the end of TikTok Shop in Indonesia, and also around 44 hours after President Joko "Jokowi" Widodo prohibited the business including online shops, implicitly still related to TikTok presence, of imported clothes. Such a business, he opined, harmed the domestic textile industry.

Starting from 10pm Jakarta time / 11pm Singapore time [Oct 4th], or around 8 hours before some feed-posted [in Instagram] by Indonesia Minister of Cooperatives and SMEs Teten Masduki about TikTok Shop and Minister of Trade Regulation No. 31/2023 [Permendag No. 31 tahun 2023 [around 7am Jakarta or 8am Singapore, assume he’s / Pak Teten posted very early before ceremony of Indonesia military anniversary], due to Shopee policy and logistics restrictions, and to adjusted with Minister of Trade Regulation No. 31/2023 [Permendag No. 31 tahun 2023], Shopee, a subsidiary company of SEA Limited, decided cross-border Sellers are strictly prohibited to sell. Actually, this decision is similar to June 18th, 2021 [2 years 4 months ago], but decision 2021 is a limited category of product. The newest decision by Shopee is all categories.

X / Twitter is exploring DM commerce and live shopping — but building a shopping business costs very big money or budgeting, according to The Information senior journalist Erin K. Woo. TikTok Shop US can lose US$500m+ this year because parent co ByteDance generated US$6.8b in cash in Q1 alone. X does not have that luxury. Facebook / META tried to make one-click social commerce happen in 2014, and it didn't go anywhere. Wonder how X is going to drive a different outcome.

TikTok's U.S. e-commerce general manager, Sandie Hawkins, is leaving the company. TikTok has hired two retail veterans who worked at Amazon and Meta Platforms, Nicolas Le Bourgeois and Marni Levine, to oversee U.S. ecommerce. The shakeup comes as TikTok’s CEO Shou Zi Chew is trying to build a big TikTok e-commerce business.

In Asia, after end TikTok Shop in Indonesia, Raffi Ahmad, celeb-billionaire and business ally of Kaesang, son of Indonesia President Joko Widodo and chief political party [ KOMPAS - GRAMEDIA was investigating that Raffi fortune in around 50 billion rupiah], move from TikTok Shop to Instagram live, a facebook / META product to selling a products. 

Albeit not yet a regulation, or, clear regulation about [again] banned selling via instagram live [because TikTok already banned, and maybe TikTok questioned why TikTok Shop get banned but Instagram live [uses to selling/marketplace] not get banned, the new problem maybe sparks again after Instagram [again, META PLATFORM / Facebook product] posted 5 hours ago by Minister of Cooperatives and SMEs Teten Masduki.

Teten explained why the Indonesian government banned TikTok Shop because currently ByteDance just handed a trade representative office (KP3A) permit, and not yet [1] established new - separate a legal entity / permanent office for specific business / commerce, and not yet [2] fulfilled Minister of Trade Regulation No. 31/2023 [Permendag No. 31 tahun 2023].

For comparison, expecting another potential big deal between Indonesia government and or Indonesia entities business [private sector] with Boeing, [yesterday, Oct 4th, 2023] Boeing established a new permanent office in Jakarta Indonesia, according to a joint statement between Indonesia transport ministry and Vice President - Commercial Sales & Marketing - Global Strategic Initiatives at Boeing John W. Bruns. Country Managing Director - Indonesia area for Boeing Company is Zaid Alami, and Regulatory Affairs for Asia Pacific is Myles Brown, Director of Communication is David Sidman, and Alex Feldman as President of Southeast Asia for Boeing.

If TikTok just a KP3A [and finally get banned, for TikTok Shop], the new problem is are Facebook / META also just handed a trade representative office (KP3A) permit and not yet fulfilled Minister of Trade Regulation No. 31/2023

Minister of Trade Regulation No. 31/2023 concerning Business Licensing, Advertising, Guidance and Supervision of Business Actors in Trading via Electronic Systems was stipulated on Monday (25/9/2023) and promulgated on Tuesday (26/9/2023). Minister of Trade Regulation Number 31 of 2023 concerning Business Licensing, Advertising, Guidance and Supervision of Business Actors in Trading through Electronic Systems recognizes that there are six business models for business actors trading through electronic systems or domestic PPMSE [Organizers of Trade Through Electronic Systems (Penyelenggara Perdagangan Melalui Sistem Elektronik/PMSE)]. The six business models in question are online retail, marketplace, classifieds, price comparison platform, daily deals, and social commerce.

Foreign Company Trade Representative Office (KP3A – Kantor Perwakilan Perusahaan Perdagangan Asing) which is led by one or more Foreigners or Indonesian citizens appointed by the parent company as Representative Executives in Indonesia. The functionality of KP3A is limited to:

• Introduce, promote and market the goods produced by a parent company, as well as providing information, or directions for use and importation of goods to companies / users in Indonesia;

• Conduct market research and surveillance in Indonesia for domestic sales of goods produced by parent company;

• Conduct market research on the items required by the companies/users in Indonesia as well as providing information about the terms of the export of goods to companies in the Indonesia;

• Closing and signing of contracts for and on behalf of the company that is appointed by the parent company in Indonesia for export of goods.

The basic documents required to incorporate KP3A are same as KPPA. But to perform the trading related activities in KP3A, a license (SIUP3A- Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing) must be obtained from Indonesia Investment Coordinating Board (One Stop Services – PTSP BKPM). Based on its validity SIUP3A is categorized in two groups, namely:

• Temporary SIUP3A (Valid for 2 Months)

• Permanent SIUP3A (Valid for 1 year)

SIUP3A can be extended 2 times for 1 year each, giving maximum validity of 3 years. The extension of SIUP3A depends on the validity of appointment letter of Representative Executive.

Only position in a KP3A which is mandatory is the Chief Representative. The chief is appointed by the parent company and manages the day-to-day business of the office. The parent company can replace the Chief Representative by official letter of appointment of a new chief.

In case the appointed Chief Representative is a foreign national, the KP3A must apply for a long term work and stay permit after the chief is officially appointed.

Another key is what actually DO and DON’T in July - August 2022, when a lot of internet companies, or, by Indonesia Telco minister, categorized ‘Private Scope Electronic Systems Operator /PSOSE’ [Penyelenggara Sistem Elektronik] must comply, must registered. 

Former Indonesia Telco Minister Johny Gerard Plate, arrested because corruption months ago, already asked internet media company, including Tiktok / ByteDance, SEA - Shopee, and Facebook / Meta Platform to register if willing to create a business division of e-commerce. From website Indonesia Telco Ministry.

Shopee try to adjust with every regulation under Telco Ministry, directly meet former Telco Ministry-now arrested, since 4 years go

Indonesia Telco Ministry [start around January 2021, but deadline-and-very rush chaotic in July-August 2022] demanding that every internet media / PSOSE, social media services and online streaming platforms to register with the government. to be regulated. EU and UN-WEF demand ever-more censorship. Demanded streaming companies register with the government for content regulation, and created a registry of journalists. This [Indonesia] decision, duplicated in Canada since October 1st, 2023.

Back to Zulkifli Hasan, Indonesia Trade Minister.

Indonesia Trade Minister Zulkifli Hasan on Wednesday told reporters that the regulation is intended to ensure "fair and just" business competition, adding that it was also intended to ensure data protection of users.

He warned of letting social media become an e-commerce platform, shop, and bank all at the same time.

[9 hours ago, posted by DKI Jakarta government twitter / x official account. Provincial Administration of Jakarta, via PASAR JAYA, is owner Tanahabang]

He would claim to have experienced economic hardship as a child, saying he learnt to work hard by selling eggs produced on the farm. He supported himself with jobs from washing taxis to selling drinks, and then door-to-door salesman of pots.

He watched the realism of struggling low-income people in Indonesia. As (former) Minister of Forestry (21 October 2009-19 October 2014) and now Minister of Trade (15 June 2022-now), he pushes himself “pro-growth, pro-job”, so he empathizes with [current] bankruptcy, quiet seller in a lot of traditional markets in Indonesia after predatory price-war by e-commerce and by TikTok Shop, stark contrast pricing grocery vs e-commerce.

[4 months ago, OVO linkedin posted an event with one attendance is Vice Minister of Trade Jerry Sambuaga [RED SHIRT], husband of Lily Marpaung Sambuaga]

The problem, or, implicit conflict of interest in his, again, Vice Minister, Jerry Adithya Ksatria Sambuaga. Jerry's spouse, Ms Lily is PR for OVO, startup-leading payment under Lippo Group. OVO was founded by Lippo Group and received permission to operate as a fintech company throughout Indonesia on 25 September 2017 with an e-money license for Bank Indonesia. OVO is a product of PT Visionet International, which is the digital financial services subsidiary of the Lippo Group. Vice Minister Jerry is son of Theo L. Sambuaga, Pak Theo was appointed to be CEO Lippo Group on September 2010 [13 years go].

The more complicated, although not extremely quiet like Tanahabang or Atrium Senen, a lot of malls under Lippo Group [mostly with title ‘VILLAGE’, such as Kemang Village, Pejaten Village] in entire Indonesia, not only Jakarta, actually facing ‘quiet attendance’ too. Tanahabang and Atrium Senen to be extreme cases because both markets are very strategic [near railway station and bus station] also actually only 3 km from the Presidential Palace. Tanahabang is 3 km to the west from Palace, Atrium Senen is 3 km to the east from Palace. 

Back to Zukifli. He ensured a lot of plantation companies (including palm oil companies) to keep operating despite lack of fulfilled regulation, haze, burning forest, etc. Zulkifli himself is the son of a farmer in the middle forest in Lampung. President Jokowi reshuffles several ministers, including former Minister of Trade Muhammad Luthfi. After being appointed to be new Minister of Trade (replacing Muhammad Luthfi), he fights to ensure a lower price of palm oil after scarcity between October 2021-May 2022, and now fight for traditional market.

The new regulation also requires e-commerce platforms in Indonesia to set a minimum price of $100 for certain items that are directly purchased from abroad, according to the regulation document reviewed by Reuters, and that all products offered should meet local standards.

Zulkifli said TikTok had one week to comply with the regulation or face the threat of closure.

Indonesia Vice Minister of Trade Jerry Adithya Ksatria Sambuaga earlier this month named TikTok's live streaming features as an example of people selling goods on social media. Again, Jerry's spouse, Ms Lily is PR for OVO, startup-leading payment under Lippo Group. OVO was founded by Lippo Group and received permission to operate as a fintech company throughout Indonesia on 25 September 2017 with an e-money license for Bank Indonesia. OVO is a product of PT Visionet International, which is the digital financial services subsidiary of the Lippo Group. Vice Minister Jerry is son of Theo L. Sambuaga, Pak Theo was appointed to be CEO Lippo Group on September 2010 [13 years go].

The more complicated, although not extremely quiet like Tanahabang or Atrium Senen, a lot of malls under Lippo Group [mostly with title ‘VILLAGE’, such as Kemang Village, Pejaten Village] in entire Indonesia, not only Jakarta, actually facing ‘quiet attendance’ too.

Last time Indonesia President Jokowi was very angry [and viral] about importing products, was about hoes [cangkul], why Indonesian must import a hoe and cannot make it himself. Now in the middle of TikTok [ByteDance] / TikTok Shop, Indonesian President Joko "Jokowi" Widodo prohibited the business including online shops, implicitly still related to TikTok presence, of imported clothes. Such a business, he opined, harmed the domestic textile industry. President Joko Widodo asked to prioritize locally produced goods over imports, which could boost domestic industry and rejuvenate the domestic market amid tight competition between online shops and traditional markets.

“That disrupts the domestic textile industry. Imported clothes are too cheap, you cannot imagine how imported clothes just sell 5000 Rupiah [35 cent dollar], this is disrupting [domestic textile industry],” said the President.

He claimed to have instructed related institutions to track down such import businesses.

According to detik-transcorp journalist who very diligent to recheck TikTok - ByteDance apps in his cell phone, ‘YELLOW BUCKET’ [an icon to buy something] in TikTok apps officially disappear Wednesday Oct 4th, 2023, 5pm Jakarta / 6pm Singapore today, to fulfill local regulation, or, after greater good - a meeting between Minister Luhut and CEO ByteDance. Pak Luhut not detailing where the meeting, just saying he and CEO ByteDance Shou Zi Chew [周受资; pinyin: Zhōu Shòuzī] have an agreement, Luhut saying during a gaggle with reporters in the middle of celebration his birthday.

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