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GoTo and TikTok Enter Strategic E-commerce Partnership to Support Indonesian MSMEs

Indonesia

ByteDance Ltd.’s TikTok has entered into a significant $1.5 billion joint venture with Indonesia’s GoTo Group, marking a strategic move to relaunch its shopping app in the country’s thriving online retail market.

The collaboration involves the integration of TikTok’s Indonesian TikTok Shop business with GoTo’s e-commerce powerhouse, Tokopedia, according to a joint statement released by the companies on Monday.

TikTok secures a commanding 75% stake in this combined entity, which will oversee the integration of shopping features within TikTok’s social media app specifically tailored for the Indonesian market. This alliance is strategically crafted to overcome regulatory obstacles and pave the way for TikTok to revive its online-shopping services in Southeast Asia’s largest retail landscape.

In September, Indonesia implemented sweeping regulations that compelled TikTok to separate payments from shopping activities within the country. This compelled TikTok to temporarily halt its online retail service just as it was gaining momentum in competition with Sea Ltd. and GoTo. The Indonesian government, prioritizing the protection of local businesses, particularly smaller enterprises, has signaled its approval for the new pact between TikTok and GoTo.

TikTok Shop stands out as the fastest-growing feature for ByteDance, a Beijing-based company closely held by ByteDance, as it seeks diversified revenue streams beyond its immensely popular social media service. Targeting Indonesia’s online-shopping market, a nation with a population of 278 million, serves as a strategic model for ByteDance’s global expansion plans, extending from the US to Europe.

Having initially introduced the shopping feature in Indonesia in 2021, TikTok witnessed instant success, encouraging its expansion into online retailing in other markets, including the US. This year, TikTok has committed to investing billions of dollars in Indonesia and the broader Southeast Asian region, solidifying its commitment to the region’s digital landscape.

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