Shop Transactions to be Banned in Indonesia: How Has TikTok's Revenue Been Generated Until Now?

The prohibition of buy-sell transactions through TikTok Shop is stipulated in the revised Regulation of the Minister of Trade (Permendag) Number 50 of 2020, which was signed on Monday (25/9/2023).

Citing *Katadata*, Trade Minister Zulkifli Hasan, also known as Zulhas, stated that social e-commerce platforms like TikTok Shop are only allowed to promote goods and services like product advertisements frequently shown on television. The revision of Permendag Number 50 of 2020 also mandates the separation of e-commerce and social media functions.

“They must be separated so that algorithms are not all controlled and to prevent the use of personal data for business purposes,” said Zulhas, as reported on Wednesday (26/9/2023).

The regulation also governs the sanction mechanism for e-commerce platforms that are still integrated with social media services. Penalties imposed on violators are implemented gradually, through warnings up to closure.

"If anyone violates, this week I will send a letter to Kominfo to issue a warning. After that, it will be shut down," said Zulhas.

A *Bloomberg* analysis written by *CBS News* mentions that TikTok Shop has experienced great success in Asia. In Indonesia alone, TikTok has over 100 million active users, who on average spend more than 100 minutes on the app every day.

This ByteDance shopping platform targets merchandise sales of US$20 billion in 2023, more than four times higher than last year.

So, how is TikTok's financial condition lately?

Data from the *TikTok Report* processed by Business of Apps shows that the initial revenue of the Chinese application reached US$63 million or Rp979.51 billion (assuming an exchange rate of Rp15,547 per US$) in 2017. Just a year later, TikTok's revenue reached US$150 million or Rp2.33 trillion.

TikTok's revenue skyrocketed during the Covid-19 pandemic, reaching US$2.64 billion or Rp41.04 trillion in 2020. The platform's existence grew even higher, increasing its revenue to US$4.69 billion or Rp72.91 trillion in 2021.

The latest report shows that TikTok has earned US$9.4 billion or Rp146.14 trillion in 2022.

(Also read: 10 Most Downloaded Apps Globally in 2022, TikTok is the Champion)