Dear reader,
In a strategic move, TikTok Shop is poised for a powerful resurgence in Indonesia through a groundbreaking deal with Tokopedia following a two-month ban spurred by new social commerce regulations.
The merger enables TikTok to seamlessly integrate with Tokopedia, leveraging the latter’s extensive logistics network and financial products. Tokopedia, holding a significant 35% of Indonesia’s total GMV, strategically avoids costly subsidy wars by merging with TikTok Shop, which recorded an impressive US$4.4B GMV in the region last year.
The deal de-risks GoTo’s e-commerce business and aligns with its profitability goals. Analysts emphasise the potential wave of similar mergers across the region, inviting scrutiny over foreign companies and their relationships with local platforms. TikTok’s localisation strategy becomes critical, with the combined Tokopedia-TikTok Shop alliance projected to capture a 40% market share, surpassing Shopee.
While uncertainties persist about the separation of social media and social commerce, TikTok’s deep pockets position it as a formidable force in live selling, impacting Shopee’s competitiveness. As the Indonesian government closely monitors the trial campaign, the success of this partnership could redefine the landscape of Southeast Asia’s e-commerce sector.
Sainul,
Editor.
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TikTok Shop gets winning hand in Indonesia via Tokopedia mega deal
For Tokopedia, given its significantly larger share of Indonesia’s total gross merchandise value (GMV) – which sits at 35% compared to TikTok Shop’s 5% – the decision to pursue a merger seems strategic, enabling it to avoid costly subsidy wars for market dominance.
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The post Ecosystem Roundup: TikTok Shop gets winning hand in Tokopedia deal | Startup investments in SEA decline 65% in 2023 appeared first on e27.