Tanah Abang: Southeast Asia's Textile Titan Grapples with Modern E-commerce

For centuries, Tanah Abang in Central Jakarta stood proud as Southeast Asia's premier textile and clothing hub, drawing traders from Asia and even the distant shores of Africa.

by Faruk Imamovic
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Tanah Abang: Southeast Asia's Textile Titan Grapples with Modern E-commerce
© Getty Images News/Dan Kitwood

For centuries, Tanah Abang in Central Jakarta stood proud as Southeast Asia's premier textile and clothing hub, drawing traders from Asia and even the distant shores of Africa. However, today's hallowed halls echo a different story.

Foot traffic, which once rivaled the best shopping streets in the world, has now halved since the advent of the pandemic. But is it just the pandemic that has caused this significant drop? Stallholders in this historic market, which boasts a rich 300-year legacy, attribute the dwindling crowds to a newer adversary: TikTok Shop.

This e-commerce feature of TikTok, the global video-sharing sensation, offers a unique selling proposition. As Hairun Nisa, a veteran trader in men's casual clothing at Tanah Abang, told Al Jazeera, “In TikTok, people sell their products using video and can interact with consumers in real-time”.

She laments, “TikTok is really bad for my business”. Roni Waskito, another trader who has been selling shoes at Tanah Abang since 2010, reminisces, “It’s not like the old days when this market was always crowded”.

He too points a finger squarely at TikTok for the slump.

E-commerce Boom Meets Regulatory Scrutiny

Within just a year of its 2021 launch, TikTok Shop attracted a staggering 6 million sellers in Indonesia. By the end of that year, it had claimed a 5 percent stake in Indonesia's flourishing $52 billion e-commerce market.

Predictions from Singapore research firm Momentum Works anticipated a whopping 350 percent growth in sales for the platform this year. However, these lofty ambitions hit a stumbling block when the Indonesian government intervened on October 5, placing a ban on the platform.

But why this abrupt action? Jakarta cites the need to safeguard the nation's 64 million micro, small, and medium enterprises (MSMEs), including those iconic merchants of Tanah Abang. The Indonesian Trade Minister, Zulkifli Hasan, criticizes TikTok Shop for fostering predatory pricing and flooding the market with inexpensive imported goods.

Further, he contends that the platform is not in line with existing regulations. “Transactions are not allowed on social media. Like television, social media is only for advertising,” Hasan emphasized during a recent visit to Tanah Abang.

As technology continues to revolutionize commerce globally, traditional marketplaces like Tanah Abang are at a crossroads. The balance between embracing modern e-commerce while protecting the integrity and legacy of these historic markets remains a challenging endeavor.

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