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Sea Limited (NYSE:SE) shares fell more than 6% on Wednesday after a report suggested that TikTok, owned by Chinese tech conglomerate ByteDance (BDNCE), is attempting to go after the Indonesian e-commerce market.
TikTok would be able to freely collaborate with any e-commerce platforms as long as it abides by applicable rules in Indonesia, state news agency Antara reported, citing Deputy Minister of Trade Jerry Sambuaga.
“Earlier, TikTok did not conform to rules and did not have a permit (as an e-commerce platform). Once it has the permit, it can collaborate with anyone as long as it abides by applicable regulations and procedures,” said Sambuaga, according to the report.
Sambuaga noted that TikTok is currently making efforts to comply with applicable rules.
In October, TikTok halted e-commerce transactions in its TikTok Shop app in Indonesia after the country introduced a ban on e-commerce trade on social media. Indonesia passed a rule in September prohibiting social commerce companies from facilitating direct e-commerce payments on their platforms.
The government has been trying to ensure that collaboration between TikTok and any e-commerce platforms will not harm other business players, mainly micro, small, and medium enterprises, or MSMEs.
Citi previously said it viewed the potential rule as a positive development for traditional e-commerce players in Indonesia particularly Sea (SE) due to the latest competitive intensity between TikTok and Sea’s e-commerce platform Shopee.
Seeking Alpha’s Ravikash contributed to this story.
