TikTok to Revive E-commerce in Indonesia with $1.5 Billion Tokopedia Investment

ByteDance’s TikTok has entered into a strategic partnership with GoTo’s e-commerce unit, Tokopedia, announcing the acquisition of a 75.01% controlling stake in a joint venture entity. This collaboration, involving a $1.5 billion investment from TikTok over time, aims to revitalize online shopping features through TikTok’s social media app in Indonesia.

As part of the transaction, Tokopedia will initiate the acquisition of TikTok Shop’s Indonesia business for $340 million in the fourth quarter of this year. Subsequently, TikTok will acquire the majority stake in the combined entity. The overall deal is slated for closure in the first quarter of 2024.

The strategic move follows Indonesia’s recent ban on direct payments for online purchases on social media platforms, introduced to safeguard smaller local merchants and users’ data. Consequently, TikTok suspended its e-commerce service in compliance with the new regulation.

TikTok Shop Indonesia, launched in 2021, garnered around 106 million users in Indonesia as of October, making it the second-largest market for TikTok after the U.S. Indonesia ranks as the third-largest market in Asia, trailing only China and India, with 167 million active social media users, representing 60.4% of the total population.

The joint statement by TikTok, Tokopedia, and GoTo highlights their commitment to transforming Indonesia’s e-commerce sector. The collaboration is expected to generate millions of job opportunities over the next five years, with a focus on supporting over 90% of combined business merchants who are Micro, Small, and Medium Enterprises (MSMEs). Joint initiatives are in the pipeline to bolster and uplift these MSMEs in the Indonesian market.