TikTok completes an $840 million deal to acquire a 75.01% stake in Indonesia’s leading e-commerce platform, Tokopedia, allowing the Chinese social media giant to re-enter the country’s online shopping sector. The partnership with Indonesian tech conglomerate GoTo positions TikTok to integrate its TikTok Shop’s Indonesia operations into Tokopedia, marking a strategic move to navigate the challenges posed by the country’s ban on social media-based online shopping.
31 January 2024 – TikTok, the Chinese social media giant, has successfully concluded its acquisition of a 75.01% stake in Tokopedia, Indonesia’s largest e-commerce platform. The deal, valued at $840 million, was completed as part of TikTok’s strategic move to reenter the online shopping landscape in Indonesia.
The agreement, initially established in December, allowed TikTok, owned by China’s ByteDance, to regain control of its online shopping business after facing a setback in September. Indonesian tech conglomerate GoTo revealed that TikTok had to close its emerging e-commerce service, TikTok Shop, following Indonesia’s ban on social media platform-based online shopping. The ban was implemented to safeguard the interests of smaller merchants and protect user data.
As a part of the collaboration with GoTo, TikTok Shop’s Indonesia operations will be integrated into the expanded Tokopedia entity. GoTo Group CEO Patrick Walujo expressed enthusiasm about the partnership, stating, “Today marks the completion of a partnership with TikTok that will continue to bring benefits to Indonesia and its MSMEs [micro, small, and medium enterprises]. It is also a big step forward for GoTo Group.”
In the same announcement, GoTo highlighted its positive adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) in the final quarter of 2023, meeting the set targets. However, specific details on the earnings will be disclosed in March. GoTo, known for its diverse services such as ride-hailing, delivery, and financial services, also hinted at the possibility of a share buyback as its profitability improves.
Ahead of the announcement, GoTo’s shares experienced a 1.15% increase, closing at 88 rupiah each. The successful collaboration with TikTok is poised to reshape the e-commerce landscape in Indonesia and contribute to the growth of both companies in the Southeast Asian market. – ref: Reuters
