Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem
RESEARCH BACKGROUND
TikTok is a social media app
where people make short videos
and interact with one another.
They make short videos and have
been an influential app for the
people across the world especially
for Indonesia. Indonesia is the
country that has the second
biggest number of TikTok users
after the United States. Numerous
Indonesian citizens use TikTok as
their daily social media apps, up to
100 millions of Indonesian citizens
are online everyday which is
almost half of the country’s
population itself.
This social media app is not only
influencing the citizens in terms of
entertainment only, however it is
also influencing in terms of the
economy as well, TikTok shop
was introduced in the first quarter
of 2021, on 17 April 2021. It has
been a massive break for the
Indonesian Economy. [2]
However, the Indonesian
government found TikTok to be a
threat, as illegal transactions,
fraud and the misimplementation
of tax regulations might happen.
Hence, the TikTok shop was shut
down on October 4th 2023. The
after effect of this decision
concludes the deficit of Rp1.33
trillion or $82000 equivalent for
TikTok itself. In which TikTok shop
collaborated with GoTo and they
bought 75% of the stock, then
25% of the deficit was
experienced by Indonesia. Thus,
the deficit in Indonesia’s economy
was approximately Rp443 billion.
[2]
PROBLEM FORMULATION
Does the social commerce
platform TikTok Shop contribute
positively to Indonesia's
socioeconomic growth?
The epicentre and aim of this
study is to investigate how TikTok
Shop can drive Indonesia’s
economy in both long and short
term. If only there were no
challenges, it would boost and
give the utmost advantage to this
country. However in reality, this
entrepreneurship potential and
market access might be taken into
a halt due to internal and external
factors.
To begin with, the main concern of
the users is that this ‘business’ is
not a promising one. In simple
words, uncertainty.They might find
working in an office and/or
opening a real physical shop
benefits them better than TikTok
Shop. At first, they might be
driven and attracted to the
popularity of this so-called
business, but the shift and the
difference between those
successful and not yet successful
ones might get those users
abandoning this job. Because in
reality, those competitors who had
those marketing sales at their
peak usually have a more
developed marketing team, ideas,
relations with other stores, a better
price to quality ratio, and other
better things due to their
experience in the marketplace.
As to closing, TikTok Shop’s
minimum age requirement of 17
years old, limits and barricades
the youngsters of their ideas to be
made realistic. Youngsters right
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem

now are usually interested in DISCUSSION (SURVEY

online entrepreneurship with their
outstanding innovations, whilst
these restrictions might make
themselves being
underestimated. Thus, this can be
an internal factor of the algorithm,
yet it relates so much with the
external factors (users).
Additionally, those limitations
mentioned above can gradually
scrape Indonesia’s economic
growth potential out of this
platform.
RESULT)
The survey that we conducted
was filled by 50 respondents. Most
of the respondents are 13-21
years old which are 45.1% and the
next second largest percentage
are from the people from 22-35
years old for 43.1% and the rest
are the respondents which are
more than 35 years old.

Most of the respondents are

students as we have mentioned
earlier that most of the
Fig. 1 respondents are students as the
majority of the respondents are
RESEARCH OBJECTIVE 13-21 years old. More than half of
our respondents use TikTok which
The research objective is to is 64.7% of them and the other
disclose TikTok’s Impact on
35.3% of our respondents don’t.
Indonesia’s economics. The
survey that we conduct is to find
out the people’s opinion in our
environments regarding the
impact of this platform in their
lives. The research is to find out
the national economical condition
that is impacted by Tiktok. In short
words, the essay that we make is
to inform and analyse deeply on
how Tiktok is impacting on
Indonesia economy, influence
conventional businesses that
have occurred earlier, and how Although most of our respondents
people react to the impact that use TikTok, 51% of our
Tiktok brings. respondents do not use the social
media app as frequently. 52.9% of
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem
our respondents make
transactions from TikTok
influence, and the rest 47.1% do
not purchase any product from
TikTok influence. The products
that are purchased because of the
marketing from TikTok is mostly
done online which is 48.4%.
The products that are purchased
from Tiktok are majorly ranging
from the price Rp. 50000 to Rp
100000 which is 54.8%. The
second most common products
prices range between from Rp.
100000 to Rp. 500000 which is
32.3%. From this result we can
see that most of the products
purchased by the respondents are
mostly medium range products.
Majorly our respondents of 66.7%
of them assume that Tiktok has
both positive and negative
interest. Almost one third of our
respondents (29.4%) think that the
social media app has a positive
influence on the national economy
of indonesia. The rest assume that
it has a negative impact on the
economic condition of Indonesia.
We enquired our respondents to
share their opinions regarding
Tiktoks impact on Indonesia's
national economy. And they
explain their opinions according to
their perspective. And the
conclusion is, The benefits you get
from Tiktok are Brainstorming,
Promoting products easily,
Update current happenings and
Global reach. However, it also has
its downside: a possible over-
reliance on the platform, the fight
against traditional stores, and the
propagation of harmful content. In
such a way TikTok's influence on
sectors as well as individuals are
up and down in terms of
perspective.
Majorly and almost all of our
respondents (94.1%) agree that
Tiktok has generated new
economic opportunities in
Indonesia. The rest of them do not
agree.
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem
Our respondents' opinions are that
Tiktok can give significant new
opportunities for business and
entrepreneurship in Indonesia. It
is a marketing method that
businesses use to get their
products and services listed on
the first page of the world's leading
Search Engines and users pay
them only when the ad is clicked
while promoting a product,
business or website. TikTok is
viewed as a platform that
promotes business, sales and
money (either through selling
products or affiliate marketing).
The effectiveness of Revive Old
Post comes from its user-friendly
interface, and its super simple
algorithm. All in all, TikTok seems
to be a force for increasing the
economic pie and spurring digital
innovation especially around the
world.
There is no consensus on if
shopping on TikTok can save a
country's economy with
judgement Here are five reasons
that companies and marketers
should care about TikTok;TikTok
creates a place for niche brands to
thriveBy turning regular men into
mini-celebrities, it has the power
to produce digital stars and enable
small businesses to support the
rise of digital marketing. You can
also leverage selling on TikTok to
open up the global market while
giving a boost to the local brands
and likely pulling some money
from outside the country.
However, there are also
uncertainties about the
government's policies, with new
regulations, re-adjustments or
how to compete with offline stores.
TikTok may indeed stoke
economic fires, yet it's important to
remember that its potential to do
harm isn't evenly distributed.
More than half of the respondents
(56.9%) agree that Tiktok has a
negative impact on conventional
businesses. Apparently, the
opinions on how TikTok affects
traditional companies is just as
mixed. TikTok is potentially seen
as bringing new ideas and scaling
market penetration, while others
are concerned that they will lose
customers that are going to go and
shop for them online. Factors such
as ease of access, price and
adaptation to digital trends are
major contributors to whether or
not such changes impact on
traditional businesses.
Opinions on The Effect from
TikTok to The Indonesian
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem
Economic Benefit from TikTok to
the Indonesian economy vary
widely on a spectrum. While
supporters view this as a means of
fuelling innovation and widening
the scope of markets, critics call it
out for possible political
manipulation and regulatory
hurdles. If TikTok can adjust its
practices to fit local laws and work
in conjunction with local
governments, it may succeed in
economic contributions as well. At
the same time, they are optimistic
that TikTok can actually help local
products and reach a wider global
audience that could in turn support
Indonesia's economic growth.
DISCUSSION (RESEARCH
DISCUSSION)
As Indonesia's digital economy
grows, TikTok Shop and other
social commerce platforms look to
dominate their industry in the
future. The power of its platform
lies in its uniqueness for an
ecosystem that enables individual
entrepreneurs, and as ecosystem
players, its potential to be an
electricity factor multiplier for
Indonesia's economic growth will
harness thousand fictions. [3]
First, and foremost TikTok Shop
can add an amount of tax money
into the governmental treasury. As
the vibrant online marketplace
encourages more transactions,
their business thrives and their
seller revenue increases. This
means a larger tax base,
capturing revenue from both
corporate taxes on seller earnings
— and, potentially, from sales tax
collected at the point of sale on
transactions that would otherwise
occur off the grid. This added
income could change everything,
funding important social
programs, infrastructure
development and other nation-
wide initiatives. [4]
Apart from tax income, TikTok
Shop serves as a “employment
creator”. This has created a
requirement for highly skilled
categories of professionals on
new age social commerce
platforms. However, this platform
opens up new opportunities for
those who know how to work in
social media marketing, create
content, take products critically, or
communicate with customers.
TikTok Shop is also driving
personal entrepreneurship and
creating numerous micro, small,
and medium-sized enterprises
(MSMEs). This growth of
businesses has a cascading
impact, creating job opportunities
across the supply chain, from
product being built, to logistics, all
the way through to marketing and
customer service. [5]
Social commerce can also act as
a critical tool in driving financial
inclusion, especially for people in
remote areas or for those who are
typically left out from the formal
economy. TikTok Shop enables
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem
anyone to become an online seller
and tap into a larger pool of
customers without needing to
shell out big bucks upfront. This
has given a new ray of hope to
women in the tribal belt especially
for them to be independent
women with earning sources.
At the same time, TikTok Shop
may have interesting potential for
local production. This channel will
help local businesses present
their products to the national
audience and will drive an
increase in demand for
Vietnamese-made products in
general. This greater visibility can
trigger additional production that
grows jobs both in manufacturing
and indirectly. This is where
TikTok Shop can be part of a
better Indonesian economy by
encouraging local businesses to
get stronger and supported by
domestic production.
In conclusion, by harnessing the
power of social commerce
platforms like TikTok Shop,
Indonesia can unlock significant
economic benefits. The platform's
ability to foster entrepreneurship,
create jobs, expand the tax base,
and promote financial inclusion
can pave the way for a more
inclusive and prosperous future
for the nation.
MATERIALS AND METHODS
In this project we conduct a survey
with the people in our
environment. This survey is
conducted with the people in Java.
We involve 100 respondents in
order to get a reliable result. We
conduct this survey in order to get
a more diverse perspective
towards this particular matter.
Fifteen inquiries are questioned in
this survey which involves multiple
choice questions, rating
questions, and open-ended
questions. These questions
include the questions regarding
the TikTok shop and purchase
from TikTok influence.
For the first few questions, we
grouped the respondents so we
know how to judge and give us
ideas of their perspective. The
questions asked include their age,
their job, whether they use TikTok
daily and how often they used it.
The next section, we
straightforwardly jump into the
TikTok Shop. At the beginning, we
asked them in general whether
they were affected by TikTok’s
advertisement, shop, etc , which
led them into buying the product
advertised or not, and which
method they used to buy. Next, we
asked and specified the methods
into 3 parts, online store, tiktok
shop or offline stores. Not only
that, we asked how much they
spent starting from Rp10,000 to
Rp50,000 until those over
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem
Rp1,000,000. With this method,
we could portray the differences in
which they think and trust those
shops advertised by TikTok, and
in other words the reliability of
TikTok’s advertisement.
Still in the same section yet in the
next question, it intensifies their
response on the impact of TikTok
in Indonesia’s economy, their
ideas and opinions on its
advantages and most importantly
their opinion if TikTok developed
and expands new economic
opportunities in Indonesia.
Following those questions, we
dive deeper into the TikTok Shop
and Indonesia’s economic growth
relation. We required the
respondents to insert their
opinions on whether TikTok Shop
increases Indonesia’s economy or
not. Because we are not only
relying on data, we rely on the real
life events of their opinions and
considerations to buy or not from
the TikTok Shop. On the last
question of this section, we
focused on asking if TikTok Shop
caused a negative impact on
conventional business such as
offline stores, etc. We thought of a
mutualism relationship where if
online shops customers increase,
the offline shops must also
withstand for the sake of those
who are outreached by these
platforms in rural areas.
As to conclude on the final section,
we stand out only a question
asking their conviction and ideas
on this topic and if this will bring a
positive impact into the country.
Through their different
assumptions and considerations,
it would be more likely and
possible for us to spot the
problems as well as sometimes
they have different opinions with
pros and cons contained inside of
them.
CONCLUSION SUGGESTIONS
Conclusion The study aims to
explore the Influence of TikTok
Shop on Social Economic
Development in Indonesia. These
results indicate that TikTok Shop
might be beneficial for a variety of
economic stimulus. They range
from nurturing entrepreneurship to
generating employment,
broadening the tax base and
encouraging financial penetration.
It, for example, lets people be
online sellers and reach a broader
market, which is great for those
located in remote areas. Apart
from that, it can provide
employment over diverse prongs,
from product development to
customer support. Still, the
research also recognizes the
 Unveiling TikTok’s Influence on Indonesia’s Financial
Landscape and Ecosystem

difficulties. We need to also think

about this in the light of what that
would mean for traditional
businesses, and the regulatory
uncertainty on the government
side. Hence, leveraging the REFERENCES
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