Traditional Market In Jakarta Faces Decline Amidst TikTok Shop Ban

Tanah Abang is a large textile and apparel market in Jakarta, Indonesia. It is one of the largest textile markets in Southeast Asia, and it is well-known to traders throughout Asia and as far as Africa.

However, the market is currently experiencing a decline in foot traffic. This is due to a number of factors, including the COVID-19 pandemic, the rise of online shopping, and the increasing cost of living.

Vendors however in the nearly 300-year-old market in Central Jakarta are blaming TikTok Shop in the market for the decline in business at the market. They claim that TikTok Shop has made it easier for people to buy clothes and accessories online, which has led to a decrease in foot traffic at the market.

TikTok Shop is a social commerce platform that allows users to buy products directly from the app. It is a popular platform in Indonesia, and it has grown rapidly in recent years.

Within a year of its 2021 launch, TikTok Shop had recruited 6 million Indonesian vendors, and in 2017, it took a 5 percent share of the country’s expanding $52 billion e-commerce market.

Prior to the Indonesian government’s October 5 ban, the e-commerce site was expected to expand revenues by nearly 350% this year, according to Singapore research firm Momentum Works.

The platform has been accused of encouraging predatory pricing practices, an influx of inexpensive imported goods, and breaking the law by the Indonesian Trade Minister and author Zulkifli Hasan.

“Transactions are not allowed on social media. Like television, social media is only for advertising,” said Hasan to local media during a his visit to Tanah Abang.

The latest in a string of setbacks for the program, TikTok has now been banned in Indonesia, where it has 125 million users, more than any other nation apart from the US.

TikTok denied the chance to respond to inquiries regarding the Indonesian ban, stating merely that company had abided by the law.

Some of the sellers who once supported themselves through TikTok Shop have responded with less restraint.

“We are very sad because the government closed our TikTok Shop and our sales dropped to almost nothing,” said Evo Syah, the founder of Videlin Official, a women’s clothing brand based in Bali.

According to Fithra Faisal Hastiadi, a former spokeswoman for the Ministry of Trade and an independent economist who has been vocal in her criticism of the prohibition, many stallholders in Tanah Abang were already combining offline and online sales before the restriction.

“It was the wrong move,” said Hastiadi. 

“The government argues TikTok’s model – social media combined with e-commerce – has been the major disruptor at traditional markets like Tanah Abang. But that’s not entirely true,” said Hastiadi. 

According to Hastiadi, the reduction in commerce at marketplaces like Tanah Abang is due to the lower purchasing power of low- and middle-income consumers as well as a decrease in wholesale purchasers from Africa and other regions of Asia since the COVID-19 pandemic.

Edited by Judy J. Rotich and Newsdesk Manager