In early October, Indonesia dealt TikTok a blow when it banned ecommerce on social media. Now, just two months later, TikTok has entered a strategic partnership with Indonesian ecommerce firm PT GoTo Gojek Tokopedia (GoTo) that gives TikTok a controlling stake in one of the biggest shopping platforms int the country, Tokopedia.
Through the new partnership, Tokopedia and the TikTok Shop Indonesia business will be combined under the existing PT Tokopedia banner, in which TikTok will take a controlling stake. Shopping features within the TikTok app in Indonesia, which had been paused following the ban, will now be operated and maintained by the new combined entity.
TikTok paid $840 million for 75.01% of PT Tokopedia and committed to investing more than US $1.5 billion in the combined entity over time. GoTo will own the remaining 24.9% of the venture and its other businesses, which include payment and financial services as well the Gojek ride-hailing and food delivery app, will continue to cooperate with Tokopedia as strategic partners. The transaction is expected to close in the first quarter of 2024.
To ensure the PT Tokopedia business continues to operate “in the best interests of Indonesia’s digital economy,” a committee will be established to facilitate the transition and integration of the two businesses, chaired by GoTo Group CEO Patrick Walujo, with support from the leadership of both businesses.
The new partnership will kick off with a pilot period that will be carried out in close consultation with regulators, said the companies. The first campaign of the pilot will be a Beli Lokal initiative that will launch on Dec. 12 to coincide with Indonesia’s national online shopping day Harbolnas, a government program designed to grow Indonesia’s digital economy by supporting local small- and medium-sized businesses (SMEs). The Beli Lokal campaign will be available on both TikTok and Tokopedia and will promote a broad range of merchants, with a strong focus on Indonesian products.
Going forward, TikTok, Tokopedia and GoTo will work to “transform Indonesia’s ecommerce sector, creating millions of new job opportunities over the next five years.” More than 90% of the combined business’ merchants are SMEs and the companies are planning a series of joint initiatives to support them, including:
- The promotion of Indonesian products on Tokopedia and TikTok;
- Providing skills development and other resources relating to upstream production and selling to help build the capacity of Indonesia’s SMEs;
- Providing support in areas such as marketing, branding and sustainable business practices;
- Helping local brands promote their products in international markets; and
- Establishing technology centers across Indonesia to develop local tech talent.