Is TikTok Shop Killing MSMEs in Indonesia?

Is TikTok Shop Killing MSMEs in Indonesia?
By: Winda Hudi Nurlatiffah
Chemistry Education Student
Faculty of Tarbiyah and Teacher Training
UIN Sunan Kalijaga Yogyakarta

Technology today has reached its peak. As time goes on, technology becomes ever more sophisticated, especially in the development of social media. In general, social media is a medium used for socialising or communicating over a distance (without geographical, spatial, or time limits). Today, social media is used not only as a platform for communication and socialising, but also for digital marketing. One example is TikTok. Recently, news has been spreading that TikTok Shop threatens MSMEs (UMKM) in Indonesia, one example being Tanah Abang Market in Jakarta. Why could this happen?
If we look closely, TikTok actually has many advantages for its users. One of them is that TikTok allows users to explore their creativity and express it to the world, so that TikTok users can also become famous for their creative content. As a result, they can earn income from advertising and endorsements. In addition, TikTok launched a new feature in 2021 called TikTok Shop. This feature is an innovative social commerce platform that connects sellers, buyers, and creators to provide their shopping experience. 
TikTok Shop actually benefits us as creators, customers, and sellers. Since TikTok Shop was launched, many creators have emerged to promote products, making TikTok Shop a platform for marketing business owners' products and giving new opportunities to earn income as a TikTok Affiliate. And as customers, we can also shop more easily, because it is practical and there are many attractive promotions.
However, despite these many advantages, there are negative impacts from TikTok, especially from the TikTok Shop feature itself. Why? Because TikTok Shop is a threat to MSMEs in Indonesia. The presence of TikTok Shop and its algorithm is suspected of helping the company gather the best-selling products in a country, so that it can then produce them itself and market them on the TikTok feature.
This can certainly create unfair competition, where TikTok itself has a very large number of users, which makes the risk of competition even greater. This can of course hinder the progress of Indonesian MSMEs, as local Indonesian products will be eroded by a flood of imported products sold at unreasonably low prices.
In addition, many producers or factories sell their goods directly at low prices on TikTok Shop. This phenomenon is seen as cutting the distribution chain that has so far run through MSMEs. It is true that prices at retail outlets are much higher than producer prices, because of the long market chain through distributors. If this phenomenon continues, it could kill MSMEs in Indonesia. 
However, in an era of increasingly advanced technology, small traders should still be able to compete; they must adapt by making use of today's technology. They can use social media, of course with innovative marketing strategies. They can start by building communication on the WhatsApp platform. Then, once they have many customers, they can use or grow their business on other platforms, such as Shopee, Lazada, and TikTok Shop.
In addition, regarding the Tanah Abang market phenomenon, the government is expected to tighten supervision of the sale of imported goods on marketplaces by regulating that every item entering and leaving must be carefully accounted for. The protection the government currently provides to MSMEs is regulating which imported products can be sold on marketplaces once the products have been equipped with a distribution permit from BPOM, SNI, and a HALAL certificate.  In light of this phenomenon, local products must not be allowed to lose out to foreign products.