On 21 September 2026, in Solo, Indonesia's Trade Ministry (Kemendag) launched Pilihan BuSan, a #BeliLokal showcase of ministry-curated local products. The name abbreviates Trade Minister Budi Santoso's own. Tokopedia and TikTok Shop are the first two platforms to host it. The Tokopedia storefront carries more than 110 products from small and medium enterprises (UMKM) in Solo and the surrounding area, and the curated selection is refreshed every two to three months.
The launch is a reasonable policy instrument. It is also an awkward epilogue to the rule that was supposed to keep these two businesses apart.
The strongest case for the original rule
Permendag 31/2023, issued on 25 September 2023, set out business licensing, advertising and supervision rules for electronic-system trade. Its social-commerce provisions required social media and e-commerce services to operate separately. TikTok Shop shut down its Indonesian commerce feature on 4 October 2023.
The argument for the rule deserves a fair statement. A video platform that controls recommendation, checkout, payments and logistics can steer attention toward its own inventory, subsidise prices to win share, and leave small merchants dependent on an algorithm they cannot inspect. Indonesian officials and merchants argued that this endangered the small businesses that make up most of the country's retail. That concern is legitimate, and a regulator that takes it seriously is doing its job.
What the separation actually produced
The rule did not remove TikTok from Indonesian commerce. TikTok Shop returned on 12 December 2023 through a tie-up with GoTo's Tokopedia, with checkout moved onto the Tokopedia-licensed side. Even then, Indonesian ministers questioned whether the arrangement complied with the regulation, and the Cooperatives and SMEs Minister said TikTok still violated it.
By 2025 the combined entity had become the second-largest platform in the market. Industry figures reported by Bisnis, based on Momentum Works data, put TikTok Shop and Tokopedia together at around 38% of tracked GMV. Shopee held about 54%. Other trackers give a lower figure of roughly a third, so the exact share depends on methodology. Either way, the structure that emerged is one large incumbent and one merged challenger, with two earlier independent competitors now combined.
The split rule therefore did not prevent a vertically integrated player. It changed the legal paperwork around one. The video side still feeds demand to the commerce side, and the commerce side still sits under the same commercial roof.
The state as customer
Pilihan BuSan sharpens this. Minister Santoso framed the programme as 'discovery commerce': many local products are good but lack promotion space and distribution, and e-commerce makes them easier to find. Selected products receive homepage placement, promotional support and discounts.
Discovery is the very function the 2023 rule treated as a risk when it sat inside a social app. Social video is where discovery happens. The ministry is now directing its curated products to the entity that the separation rule produced, and it values that entity's reach for exactly that reason.
There is nothing improper in a ministry working with the largest channels to reach merchants. Training around 200 UMKM in business licensing, content creation and affiliate marketing, as the launch did, is practical help. But the programme shows that regulators treated the discovery function as the problem in 2023 and as the solution in 2026. A rule that holds in both readings is not a clear rule.
Competition enforcement is the open question
The more consequential process is at the competition commission. On 15 April 2026 the logistics association APLE filed a complaint with KPPU. It alleges that the TikTok–Tokopedia integration ties together content distribution, algorithms, commerce, payments and logistics, enabling predatory pricing and restricting competitors' access. APLE also claims the recommendation algorithm may favour internal products and that consumers lack free choice of shipping provider. KPPU confirmed receipt on 23 April and began clarification. Later reporting says the investigation had reached its final stage by July, after which the file goes to a commission hearing. Those allegations are unproven. KPPU has made no finding.
This is the right venue. A competition case under Law No. 5 of 1999 tests specific conduct, such as tying, self-preferencing and below-cost pricing, against evidence, and it can impose proportionate remedies. A blanket structural prohibition on social platforms selling goods tests nothing. It forces a corporate restructuring, rewards whoever can afford the cleverest one, and leaves the underlying conduct question unanswered.
What a proportionate approach looks like
- Regulate conduct, not category. If self-preferencing or logistics tying is the harm, rules on algorithmic transparency and shipping-provider choice address it directly, whatever the platform's origin.
- Keep the curation neutral. If BuSan expands, Shopee, Lazada, Blibli and local marketplaces should be able to join on the same terms. Being first should not become a standing preference.
- Publish the evidence. KPPU's eventual findings should explain how it defined the market and why. Merchants and platforms in a market this concentrated need a clear precedent.
- Measure UMKM outcomes. The programme claims to help small sellers. The ministry should report sales and retention for the 110-plus products, not only launch counts.
The lesson is not that Indonesia should have left social commerce alone, or that the 2023 rule was acted on in bad faith. It is that structural separation rules are blunt, easy to satisfy on paper, and slow to deliver the competitive outcome they promise. Jakarta's own partnership with the merged entity suggests officials already see the platform as infrastructure. The competition process now has to decide whether that infrastructure is being run fairly.