JAKARTA – A year ago, TikTok’s e-commerce business in Indonesia was thriving. With its viral videos, TikTok had become a global phenomenon and was translating its influence into a powerful new revenue stream by allowing users to buy and sell things while its videos played.

Indonesia was a critical market and the first place TikTok rolled out this feature. The app, owned by Chinese tech giant ByteDance, had around 130 million users, almost as many as in the United States. Since its launch here in 2021, TikTok Shop has become one of the most popular places for Indonesians to buy things online.

Then one day, TikTok announced that it was removing Shop from its app in Indonesia. The government had said social media platforms would no longer be allowed to process online payments. TikTok was thus forced to suddenly stop its e-commerce activities.

Some Indonesian officials argued that TikTok was so popular that it threatened to monopolize online shopping, while others said it lacked the proper license. TikTok’s defenders in the industry said the government was acting on behalf of TikTok’s competitors in Indonesia.

The government decree does not name TikTok. It wasn’t necessary. No other app blends social media and e-commerce like TikTok has.

Facing official scrutiny is familiar territory for TikTok. The Indian government, once home to the app’s largest audience, banned TikTok in 2020 as revenge for a violent border conflict with China. In the United States, TikTok faces a possible ban that could begin as soon as January after spending years responding to concerns about its influence and safety.

But the threat in Indonesia was likely to deal a particularly devastating blow to ByteDance’s ambitions to make big money from e-commerce. ByteDance wanted TikTok to repeat the success of its sister app, Douyin, whose live video shopping business in China surpassed US$200 billion (S$265 billion) in transaction value in 2022.

New restrictions in Indonesia could prompt neighboring countries to take similar measures, said Mr Jianggan Li, chief executive of Momentum Works, a consultancy in Singapore. “This is a market they cannot afford to lose,” Mr. Li said.

TikTok executives have been scrambling to find a way to continue offering e-commerce. Word spread throughout the Indonesian tech community that TikTok was looking for a local company to team up with. And within a few weeks, she was ready to take a stake in Tokopedia, a former start-up that had become one of Indonesia’s leading e-commerce platforms.

TikTok wanted purchases back online by Dec. 12, according to two people familiar with the discussions who were not authorized to speak publicly.

This date has been one of the biggest for transactions on e-commerce platforms in China for years, and the trend has spread to Indonesia. In recent years, the government has made this a day to buy from small businesses.

TikTok Shop restarted as a pilot program under government supervision on December 11. As before, Shop appeared as a tab in the TikTok app. But now it was adorned with the Tokopedia logo and iconic green branding.