TikTok sellers in Indonesia encountered a “disaster.” At the end of last month, while everyone was still waiting for the National Day holiday, Indonesia promulgated Trade Minister Regulation No. 31 of 2023, which directly dealt a blow to the major e-commerce platforms. The purpose of this ban this time is also very clear, that isRestrict live broadcast social platforms from engaging in e-commerce.
Let the two businesses of social media and e-commerce go their own way.
If we want to say who is most affected by this rectification, it must be the live broadcast on TikTok. After all, in Indonesia, TikTokShop is considered the most prosperous new niche.
Although it only officially entered the Indonesian market in February 2021, with the hundreds of millions of users TikTok has accumulated, coupled with the live streaming model that maximizes the use of traffic, TikTok has grabbed a lot of food from the two major e-commerce giants Shopee and Lazada.
In the first year when TikTok e-commerce first entered the Indonesian market, its GMV in Southeast Asia was only US$600 million. In the second year, this number snowballed to US$4.4 billion.
Compared with other countries in Southeast Asia, Indonesia's growth rate and volume of goods directly lag behind them.
Seeing that the Indonesian market is performing so well, TikTok's immediate confidence has greatly increased. It was originally expected that the total GMV target of e-commerce this year would be 20 billion US dollars.
However, now that Indonesia has resorted to such a trick, not to mention the GMV of 20 billion US dollars, even the store has been destroyed.
On October 4, TikTokShop, which entered the Indonesian market less than 30 months ago, officially closed its doors, and the 6 million Indonesian merchants on it suddenly lost their "home".
And the time point of the shutdown is just before Double Eleven. Many major promotions have begun to warm up, and many manufacturers have already stocked up and prepared goods for Indonesia.
Now that the regulations have come out, everyone is dumbfounded. Not to mention making money by selling goods, the costs of hoarding may even bring down countless businesses.
This wave of operations directly made many netizens wonder, why were the regulations promulgated so suddenly? Co-authored: Is Indonesia going to start imposing sanctions on China? ?
In fact, to be honest, this time Indonesia is really different from the kind of chaos in the United States and India. Indonesia is more for self-protection.
Because since TikTokShop came to Indonesia, its strategy of "algorithm mastering preferences to promote products, and then entering the low-price strong market to form a monopoly" has had a certain impact on Indonesia's local business ecology.
The reason why it has the confidence to charge low prices is because it relies more on China's internal supply chain and chooses less local Indonesian products.
After all, compared with Indonesia's local supply chain, Chinese manufacturers and products are more competitive.
From an Indonesian perspective, these platforms not only steal the cake from local e-commerce platforms, but also make Indonesia’s business ecosystem heavily dependent on foreign sellers.
According to a survey by Indonesian Minister of Cooperatives and Micro, Small and Medium Enterprises Teten,Since TikTokShop entered Indonesia, physical merchants have lost more than 50% of their profits.
No one would be happy with this.
Therefore, in order to prevent foreign supply chains from affecting its production and industrial ecology, Indonesia enacted the so-called Regulation No. 31.
Of course, the ban not only prevents social media from engaging in e-commerce, but also has a great impact on e-commerce platforms, as well as restrictions on cross-border goods.
This article is also quite strict. It not only sets up some cross-border commodity whitelists and stipulates the types of commodities that can be imported, but also sets a minimum price of $100 for cross-border purchase of commodities. In other words, if the price is lower than this price, you cannot buy directly from abroad.
What is the concept? 100 U.S. dollars is about 730 yuan, which means that cross-border shopping for clothes, bags, cosmetics and other cheap things is out of the question.
But a friend who used to work in the Indonesian market told me that most of the products sold in the Southeast Asian market are cheap products, mainly focusing on small items such as cosmetics and accessories.
Moreover, local people value low prices, and the unit price of products is not high. For example, if you look at the Indonesian sales list in July this year, the top three prices are 31 yuan, 4 yuan and 45 yuan respectively.
The meaning of this wave in Indonesia is already obvious. It is the business of low-end and mid-range products. For cross-border e-commerce, please don’t compete with my local manufacturers.
In short, in Indonesia, it may not be feasible for these e-commerce platforms to rely on low-price strategies to capture the market.
In addition, Vietnam has also been secretly investigating TikTok for five months. Recently, they announced the results of their investigation: TikTok violated multiple regulations and required TikTok to make corrections within 30 days.
On October 7, Malaysia also stated that it would investigate the plan to ban social media e-commerce and consider formulating some appropriate measures.
Although the chairman of their e-commerce committee later came out and said that the ban would cause serious harm to small, medium and micro enterprises, short video and e-commerce practitioners.
But it should be a certainty that other Southeast Asian countries will follow suit with restrictions.
Friends who used to do TikTok in Europe and the United States also said that they were very hungry for people doing business in Southeast Asia. The government does not regulate, and offline entities are underdeveloped. It is a completely free market, and everyone can do business freely.
On the contrary, in Europe and the United States, not only do users have a weak desire to shop, but they also have various privacy regulations. Unexpectedly, in just a few months, the Southeast Asian market would change.
Although Indonesia had its own considerations in making this decision this time, the impact of this frivolous ban on the lives of millions of practitioners has been irreversible.
Faced with such a "disaster", practitioners began to support each other to save themselves.
After the incident, a Feishu document titled "TiktokShopID Post-Disaster Reconstruction Guide" went viral in the circle of friends of practitioners. From the work problems of anchors and operators, to merchant sales channels, resource docking groups, etc., all available information is detailed.
If you have been laid off or are in a situation of changing jobs, Docs provides a large number of job search communication groups. Recruiters will also fill in their recruitment needs in the documents in the group. These requirements will be forwarded to the group for reference by job seekers.
There are also various self-help methods, including teaching anchors how to switch to platforms such as Shopee and find their own sources of goods to launch broadcasts.
If you really need an emergency, it doesn't matter. They have even established a temporary relief agency to help everyone tide over the crisis.
For those forced to close stores, the document also organizes and summarizes 7 possible self-rescue paths. For example, changing platforms, selling products, or switching to TikTokShop in other countries.
But seeing this, I still feel worried, because many methods can only temporarily maintain "vital signs".
For example, the simplest platform transfer is to move the store to Shopee and Lazada. Most people are doing this now.
But a friend told me that live streaming e-commerce is the most efficient form of monetizing traffic, and is incomparable to traditional shelves like Shopee and Lazada.
Being forced to go to other platforms means a huge traffic downgrade for live streaming sellers.
Last year, the largest goods delivery anchor brought 30 million yuan in GMV to TikTok e-commerce in one year.
If we move to other Southeast Asian countries, we have also predicted that other countries may follow up with follow-up measures. Escape to Vietnam can only quench the immediate thirst.
The problem seems to be unsolvable, but the document quotes this sentence:
Save people and lose land, and everyone and land will survive; save land and lose people, and everyone and land will be lost.
Translated, people's needs do exist and are strong. The original TikTokShop fully managed project had a monthly goal of US$30 million at the end of this year.
This group of businesses in China has the most mature mechanisms and experience, as well as strong manufacturing and supply capabilities.
Under such circumstances, finding the next opportunity is only a matter of time.
Of course, Indonesia has not blocked TikTokShop's road. It still has the opportunity to become independent, because according to regulations, as long as it does not bundle social media and e-commerce together.
In short, the tsunami in the Southeast Asian e-commerce circle has already begun, and where the next wave will hit, we can only watch as we go.
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