China’s entertainment giant TikTok is set to invest US$1.5 billion to secure a controlling stake in Tokopedia, the e-commerce arm of Indonesia’s GoTo Group.
Under the terms of the agreement, TikTok will acquire a 75.01 per cent stake in Tokopedia, Indonesia’s largest e-commerce platform, for US$840 million. Additionally, TikTok Shop’s Indonesian operations will be integrated into the expanded Tokopedia unit.
This move comes as TikTok aims to revive its online shopping services, which were halted by regulators in Indonesia following a ban on social media-based online shopping to safeguard smaller merchants and user data.
Also Read: Merchants selling via TikTok could be harming Indonesian economy: AC Ventures
The Chinese tech giant’s problems started when President Joko Widodo called for stricter social media regulations in October this year, saying that the influx of such platforms has contributed to declining domestic business sales by flooding the market with foreign imports. Trade Minister Zulkifli Hasan also said firms that do not comply with the ban on goods transactions would first be warned and then lose their license to operate in Indonesia if they fail to comply.
Following the ban, TikTok was compelled to shut down the e-commerce platform. Despite challenges, TikTok Shop had been introduced earlier in the year in the country, targeting the vast user base to compete with rapidly growing online retailers like Shein and PDD Holdings’ Temu, whose presence on TikTok had contributed to their swift expansion.
In a joint statement, the two companies outlined that the strategic partnership would initiate a pilot period, conducted in close consultation with and supervision by relevant regulators. The move reflects TikTok’s strategic manoeuvring to navigate regulatory challenges and reestablish its foothold in the Indonesian e-commerce landscape.
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