TikTok restarts e-commerce in Indonesia with US$1.5 billion investment in GoTo Gojek Tokopedia unit

TikTok will buy 75 per cent of Indonesia’s biggest e-commerce platform and inject TikTok Shop’s Indonesia business into the enlarged entity

TikTok had been forced to close TikTok Shop in Indonesia after the country in October banned online shopping on social media platforms

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TikTok will invest US$1.5 billion into Indonesia’s largest e-commerce platform. Photo: Reuters

Published: 2:49pm, 11 Dec 2023

China’s TikTok will invest US$1.5 billion to become controlling shareholder of an e-commerce unit of Indonesia’s GoTo Gojek Tokopedia, as it seeks to restart its online shopping business suspended by regulators in Southeast Asia’s largest economy.

Indonesia banned online shopping on social media platforms in October to protect smaller merchants and users’ data, forcing TikTok to close its e-commerce service TikTok Shop.

The market was among few where the short video app operator launched TikTok Shop earlier this year to leverage a large user base and to challenge fast-growing online sellers such as Shein and PDD Holdings’ Temu, whose viral marketing on TikTok helped their rapid growth.

Shares in GoTo, whose business includes ride-hailing, delivery and financial services, tumbled 8.3 per cent after the announcement, as some investors took profit from the stock’s recent rally on expectations of a deal with TikTok.

A billboard advertising GoTo’s initial public offering in Jakarta, Indonesia in 2022. . Photo: Bloomberg

“We need to see what kind of market disruption will happen after this partnership,” said analyst Maximilianus Nico Demus at Pilarmas Investindo Sekuritas.

Under the deal, TikTok will buy 75.01 per cent of GoTo’s Tokopedia, Indonesia’s biggest e-commerce platform, for US$840 million and inject TikTok Shop’s Indonesia business into the enlarged Tokopedia entity.

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