The Impulso Podcast E32: Indonesia bans purchases on social media platforms
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Sep 28, 2023 Discussion of Indonesia’s new rule banning in-app purchases on social platforms and what it means for commerce features. Examination of TikTok Shop’s options, including spinning off shopping into a separate app and the tradeoffs involved. Analysis of the political timeline, regulatory motives, and whether similar restrictions could spread to other countries.
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Social Media Transactions Prohibited
- Indonesia's regulation bans social media platforms from enabling in-app transactions and payments.
- TikTok can still be used for promotion but must separate commerce from social features.
Separate App Harms Conversion
- Forcing a separate shopping app breaks the frictionless conversion that made TikTok Shop powerful.
- ByteDance can technically launch an app quickly, but the user experience and conversion rates may decline sharply.
Weigh Ads Versus Running Commerce
- Evaluate whether selling the platform's traffic to local marketplaces is a better strategy than running e-commerce.
- Consider trade-offs between ad revenue and running full-stack commerce before committing resources.