UNAIR NEWS – TikTok initiates the TikTok project S to expand online retail services through TikTok Shop. The initiative allows the ByteDance company to sell their own products.
The initiative immediately grabbed public’s attention as many Micro, Small, and Medium Enterprises (MSMEs) used the platform for live selling. Therefore, TikTok can easily access the MSMEs’ products information.
Opportunities and Threats
Made Gita Nadya Ayu Ariani SE MSM the Management lecturer at the Faculty of Economics and Business UNAIR shared her view. She believed that the TikTok project S possesses multiple opportunities and threats for the MSMEs.
From the opportunity’s perspective, MSMEs will easily reach the public through TikTok’s livestream feature with more effective cost. However, TikTok has also planned Project S, where the company will produce its own products by utilizing market insights from Indonesia.
“The MSMEs’ concerns were that TikTok is going to be their biggest competitor as the platform has access to the customers information and the capability to produce duplicate products with the help of factories in China,” she said.
Special Strategies for MSMEs
Gita suggested that MSMEs can compete by improving the quality of their products. The China-made products are known for its low quality and require longer distribution time before they reach Indonesia. Therefore, MSMEs need to improve their quality by requesting customer’s feedback.
“The MSMEs can compete with mass-producing competitors by leveraging opportunities to create customized products tailored to customer preferences. They can create unique product characteristics,” she said.
Though the Project S has reached Indonesia, the MSMEs can still use the TikTok live selling to build emotional connections with customers and educate the market. However, it is necessary to keep the raw materials or recipes as confidential information for the producers.
Government needs to take action
Gita emphasized that the government needs to keep up with technological advancements and establish clear regulations for online trading in Indonesia. This step is important to guard the economic resilience of SMSE by restricting product imports and preserving domestic products. With adequate regulations in place, SMSE can be protected and have better opportunities to compete in the digital era.
“The government can oversee the import of goods through customs and enforce requirements for local components according to the Indonesian National Standards (SNI). This aims to protect UMKM and ensure fair competition in the market,” she concluded.
Author: Satriyani Dewi Astuti
Editor: Binti Q Masruroh
