Don’t ban TikTok Shop yet: Malaysia’s e-commerce sellers

SME Association of Malaysia president Ding Hong Sing said that despite the underlying issues concerning various ecommerce platforms, it is not all bad to have them around.

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A woman watching a TikTok livestream offering merchandise for sale in Jakarta. PHOTO: AFP/THE STAR

October 9, 2023

PETALING JAYA – Ecommerce sellers want the government to help them sell their products at major retail outlets before it considers a ban on TikTok Shop.

They say this is because such online trading platforms have helped many individuals and micro, small and medium enterprises sell their products to more consumers.

SME Association of Malaysia (SME Malaysia) president Ding Hong Sing said that despite the underlying issues concerning various ecommerce platforms, it is not all bad to have them around.

“Although online sales activities, which come with many pricing issues and overzealous promotional tactics, are difficult and complicated to govern, these platforms, like TikTok Shop, have allowed microbusinesses to reach out to potential customers directly,” he said.

The downside is that manufacturers who rely on wholesalers, resellers and middlemen get affected, he said, adding that the same goes for supermarkets and retailers.

“That’s why more of them have now moved to selling online as well,” he said.

Ding said both online and physical shopping have their own attractions and fans.

“We know that those who sell online need not pay tax, which is different from retailers. To be fair and strike a balance, if there is a ban on TikTok Shop, then these retailers should be made to sell products by microbusinesses so that they too have a chance in the market.

“These bigger retailers should allow at least 20% microbusiness products on their shelves with no listing or promotion fees imposed. This would be a fairer regulation than a total ban,” he said, adding that 78.4% of businesses in Malaysia are micro SMEs.

Ding noted that such assistance should only be extended to microbusiness operators who are genuine in selling their own products but not those who practise cutthroat pricing.

He was commenting on Communications and Digital Minister Fahmi Fadzil’s announcement that Malaysia would look into Indonesia’s ban on ecommerce transactions on the social media platform TikTok before devising appropriate measures in the country.

Fahmi said he had received complaints from the public who expressed concern about the ban, adding that several large stores had also raised issues about the price competition on the platform.

He also felt that TikTok should explain the issue of personal data protection concerning consumers and said he would call the platform soon to discuss the matter.Ecommerce seller Ahmad Fadzul Ismail, 43, from Shah Alam, said he supports a ban on TikTok Shop in Malaysia.

“Selling on TikTok Shop is like fighting with a shark. When their price is direct from the manufacturers, we can never win as local sellers,” he said.

He cited as an example, a baju kurung that his wife sold for RM119 including shipping was offered for only RM69 on TikTok Shop, while a bulk purchase of more than 10 sets could see the price drop to RM60.“It is almost our cost price, how to compete?” he asked.

Ahmad Fadzul noted that since the government could not collect any tax from TikTok Shop sellers, shopping there caused an outflow of the ringgit.

“Many buy their products from China suppliers to sell at a very small profit margin, hoping for volume to make some money. This is not good for our market in the long run. We should support more local products,” he said.

A pharmaceutical sales development executive who only wanted to be known as Jama said the fact that ecommerce transactions on TikTok or its TikTok Shop involve too much personal information is concerning.

“I recently had dealers enquiring about carrying our products on their TikTok Shop. After some research, I found that TikTok imposes stricter requirements on some documents.

“Also, it has many pricing strategies or promotions that are not in line with our company’s strict policy in price control. Sellers may end up with a loss after factoring in the discounts and shipping charges,” he said.

Jama also said he is not comfortable when details about what he consumes and the content he shares online are collected and analysed.

“I think ecommerce and social media platforms should not come too close together,” he added.

Norlin Supian and her partner Jiji, who sell household and makeup items, are hopeful for better regulations on TikTok Shop.

“We’ve been selling on Lelong.my for years before shifting to Shopee and Lazada, and recently TikTok Shop. Sometimes, the pricing strategies by TikTok Shop can be competitive and less than favourable,” said Norlin.

Jiji recalled that they once had to pay TikTok Shop back even after cutting a small profit margin because of shipping charges.

“We cannot be hoping for bulk purchases for all products. We also cannot keep selling at a loss or low margin because when prices become normal later, consumers will refuse to buy.”

They said that they also found it difficult to raise sales issues or concerns on TikTok Shop as it doesn’t seem to have a dedicated office or team in Malaysia.

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