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TikTok Makes a Comeback in Indonesia Through GoTo Partnership

TikTok acquires a 75.01% stake in Tokopedia from PT GoTo Gojek Tokopedia Tbk for US$840 million. TikTok Shop will be integrated into the expanded Tokopedia entity, enabling users to purchase products featured in livestreams and short videos. TikTok plans to invest over US$1.5 billion in the long term to support the business without diluting GoTo's stake.

TikTok, the popular short-video app owned by Chinese tech company ByteDance, has successfully reentered the Indonesian market with its acquisition of Tokopedia, an e-commerce unit of PT GoTo Gojek Tokopedia Tbk, Indonesia's largest internet and tech firm.


Industry experts are hailing this move as a strategic one, as it allows TikTok to tap into the rapidly growing online shopping sector in Southeast Asia's largest economy.


Late on Wednesday, GoTo announced that TikTok has finalised its agreement to purchase a 75.01% stake in Tokopedia for $840 million from the conglomerate.


As part of the deal, TikTok's e-commerce service, TikTok Shop, will be integrated into the expanded Tokopedia entity, enabling users to seamlessly access and purchase products featured in livestreaming broadcasts and short videos.

This development comes after TikTok temporarily suspended its online retail operations in Indonesia due to a ban on e-commerce transactions on social media platforms in September 2023. The ban was implemented to safeguard the interests of local small merchants and protect users' data.


Patrick Walujo, CEO of GoTo Group, expressed his enthusiasm for the partnership, stating, "Today marks the completion of a partnership with TikTok that will continue to bring benefits to Indonesia and its MSMEs (micro, small, and medium-sized enterprises). It is also a big step forward for GoTo Group."


TikTok also sees this collaboration as a significant milestone in its commitment to contribute to Indonesia's digital economy and support local MSMEs. The company has pledged to invest over US$1.5 billion in the long term to provide necessary funding for the business without diluting GoTo's stake.


GoTo will leverage the growth of the expanded entity and maintain its role as an ecosystem partner to Tokopedia, offering digital financial services through GoTo Financial and on-demand services via Gojek.


Having already expanded its e-commerce service to the United Kingdom, Malaysia, Thailand, the Philippines, and Vietnam, TikTok launched TikTok Shop in the United States in September. The platform allows users to discover and purchase products directly from livestreams and short videos.


Indonesia is TikTok's second-largest market, with 113 million users, just behind the United States, which boasts 116.5 million TikTok users, according to DataReportal, a data analysis company.


Zhang Zhouping, an independent analyst specialising in cross-border e-commerce, emphasised the significance of TikTok's reentry into Indonesia, stating, "Indonesia serves as a very important overseas market among TikTok's overall business layout in Southeast Asian countries."


Market research firm Statista predicts that the e-commerce penetration rate in Indonesia will reach 85.5% by 2027, with the number of e-commerce users expected to reach 244.7 million. The revenue generated by Indonesia's e-commerce sector is projected to exceed US$67 billion by that time.


However, Zhang also noted that TikTok needs to strengthen its supply chain systems and adapt its strategies to comply with local laws and regulations.


In addition to navigating regulatory challenges, TikTok faces fierce competition from established players like Amazon and Alibaba Group's AliExpress, as well as emerging cross-border platforms such as Temu and Shein, which are aggressively expanding their global presence.


Temu, a cross-border online marketplace owned by Chinese online discounter PDD Holdings, has gained popularity among overseas shoppers. Launched in the US in September 2022, Temu offers discounted products directly shipped from China and is now available in over 40 countries across North America, Europe, Asia, and Oceania.


Chen Tao, an analyst at internet consultancy Analysys, highlighted the need for Chinese online retailers to diversify their revenue sources by expanding internationally. He emphasised the importance of understanding local consumer preferences and focusing on localised operations.

 
  • TikTok acquires a 75.01% stake in Tokopedia from PT GoTo Gojek Tokopedia Tbk for $840 million.

  • TikTok Shop will be integrated into the expanded Tokopedia entity, enabling users to purchase products featured in livestreams and short videos.

  • TikTok plans to invest over US$1.5 billion in the long term to support the business without diluting GoTo's stake.


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