TikTok invests $1.5 billion in GoTo group to re-enter Indonesian market with merged online shop. Company faces data security concerns and ban on social media sales in Indonesia.
TikTok Announces $1.5 Billion Investment in Indonesian Online Shop
Chinese-owned short video app TikTok on Monday announced a $1.5 billion investment in GoTo group in a deal that would allow it to restart its online shop in Indonesia, the companies said in a statement.
Under the deal, TikTok Shop will be merged into GoTo’s Tokopedia and TikTok will have a controlling stake in that entity. TikTok has committed to invest over US$1.5 billion in the enlarged entity over time, to provide future funding required by the business, without additional dilution to GoTo, the Indonesian firm said.
Impact of New TikTok Deal on Indonesian E-Commerce Market
“TikTok, Tokopedia and GoTo will transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years,” stated the companies. However, this strategic partnership will commence with a pilot period carried out in close consultation with and supervision by the relevant regulators. The deal is expected to close in 2024.
Indonesia’s e-commerce market, dominated by platforms such as Tokopedia, Shopee and Lazada, faced a setback when TikTok Shop shut down its operations in response to regulations banning sales on social media, in an effort to protect small local businesses. Indonesia, with 125 million users, is TikTok’s second-largest global market after the United States.
