TikTok Pumps $1.5B Into Indonesia's GoTo Group To Revive Shopping App
TikTok, a subsidiary of ByteDance Ltd., is set to inject $1.5 billion into a partnership with Indonesia’s GoTo Group. This collaboration, announced on Dec. 11, 2023, will enable the Chinese social media behemoth to relaunch its shopping application in its primary online retail market.
What Happened: As per a Bloomberg report, the deal stipulates that TikTok’s Indonesian TikTok Shop will be combined with GoTo’s e-commerce branch, “Tokopedia.” TikTok will retain a dominant 75% stake in this new entity, which will manage the shopping features of TikTok’s social media app in Indonesia.
The objective of this partnership is to navigate regulatory impediments, allowing TikTok to resurrect its online shopping services in the largest retail market of Southeast Asia. The Indonesian government, committed to protecting local businesses, has signaled approval for this new agreement between TikTok and GoTo.
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TikTok’s shopping feature, the fastest-growing sector of ByteDance’s operations, is seen as a new source of revenue beyond its popular social media service. ByteDance is eyeing Indonesia’s online shopping market as a model for global expansion, stretching from the US to Europe.
This agreement may have mixed implications for GoTo. Although it could enable a significant online retail rival to persist in the nation, it also offers GoTo a potent global social media ally that could enhance shopping and payment volumes for both firms.
Why It Matters: Last September, Indonesia’s trade ministry banned e-commerce transactions on social media platforms, aiming to safeguard data and smaller offline merchants and marketplaces. This decision spurred major tech companies like Meta Platforms Inc., Alphabet Inc., and TikTok to seek e-commerce licenses in Indonesia in October 2023.
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AP Photo/Michael Dwyer, File
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