ByteDance Ltd’s TikTok has agreed to invest US$1.5 billion in a joint venture with Indonesia’s GoTo Group, marking a significant step towards restarting its shopping app in the largest online retail market.
In a statement released yesterday, the social media giant revealed plans to merge its Indonesian TikTok Shop business with GoTo’s eCommerce unit, Tokopedia.
Under the terms of the agreement, TikTok will secure a controlling 75% stake in this combined venture, responsible for managing the shopping features within TikTok’s social media app in Indonesia.
This strategic move aims to overcome regulatory obstacles imposed by Indonesia in September, which mandated a separation of payments from shopping on TikTok. This forced TikTok to temporarily halt its online retail service just as it was gaining momentum against competitors such as Sea Ltd and GoTo.
The Indonesian government, prioritizing the protection of local businesses, has signalled its approval for TikTok and GoTo’s new partnership.
The deal is poised to address regulatory challenges, allowing TikTok to revive its online shopping service in Southeast Asia’s largest retail market, with Indonesia serving as a template for global expansion from the United States to Europe Source: The nation
