Tuesday, Indonesia’s trade ministry said it is working on further regulating e-commerce, adding that social media platforms are not allowed for transactions.

Citi sees this as a positive development for traditional e-commerce players in Indonesia, particularly Sea Ltd., given the recent competition between TikTok and Shopee.

The influx of foreign goods available through social media has led to a decline in sales for micro, small, and medium-sized enterprises.

Tuesday, Indonesia’s trade ministry said it is working on further regulating e-commerce, adding that social media platforms are not allowed for transactions.

“Social media can be used only for promotions, not for transactions,” the ministry said in an official statement.

In Indonesia, users cannot buy or sell products and services on TikTok and Facebook.

Social media companies will also be prohibited from doubling as e-commerce platforms, according to the government.

Minister of Trade Zulkifli Hasan said Monday that “social media and e-commerce must be separated so that algorithms are not controlled” and “personal data” cannot be used for business purposes.

Additionally, Indonesia said it would regulate which overseas goods can be sold, adding that these products would be treated similarly to offline domestic goods. Through social media platforms, foreign goods are becoming increasingly available in Indonesia.

President Joko Widodo called for social media regulation on Saturday, citing the platforms’ impact on local businesses.

It affects MSMEs, small businesses, microenterprises, and also the market. As a result of the influx, there are some markets where sales are declining.