TikTok and GoTo announced the establishment of a strategic partnership in Indonesia.
In a joint press release by the mentioned companies, which was published last Wednesday, January 31, it is indicated that as part of the implementation of cooperation, GoTo Tokopedia and TikTok Shop Indonesia have merged within the framework of a new brand called PT Tokopedia. The new firm is jointly owned by both sides of the partnership. At the same time, the press release notes that TikTok holds a controlling stake. There is also information that the giant of the social media industry has committed to invest more than $1.5 billion in a new brand. TikTok will provide the business with future funding without additional dilution to GoTo.
Separately, the press release notes that Tokopedia and TikTok Shop in Indonesia are integrating to ensure seamless shopping.
GoTo, which is the largest digital ecosystem in the mentioned Asian country, will remain Tokopedia’s partner, providing digital financial services through GoTo Financial and on-demand services through Gojek.
GoTo Group CEO Patrick Walujo said the partnership with the social media giant will continue to benefit Indonesia and its micro, small, and medium businesses.
Stephanie Susilo, Executive Director of e-commerce at TikTok Indonesia, says that this company sees the new strategic partnership as an important milestone in its desire to contribute to Indonesia, the development of the state’s business environment, and support efforts to grow the digital economic system.
GoTo’s mission is to promote progress. The company offers technological infrastructure and solutions that help everyone access and thrive in the digital economy. The GoTo ecosystem provides a wide range of services, including mobility, food delivery, groceries, logistics, technology solutions for merchants, payments, and other financial services.
In November, the media reported that TikTok and GoTo are working on creating a new e-commerce platform. At that time, journalists noted that for the giant of the social media industry, this platform will become a driving force in activating its online shopping business in Indonesia, which is the largest market in Southeast Asia.
In December, it was reported that TikTok was investing $1.5 billion in Tokopedia. One of the largest players in the social media industry has acquired a controlling stake and maintained its own efforts in the e-commerce area in Indonesia.
The takeover of the Indonesian company by TikTok will overcome obstacles from regulators. In this case, it becomes possible to get around the Indonesian law, which was announced in September and prohibits social media platforms from making direct payment transactions for purchases in virtual space.
The takeover of Tokopedia also solves TikTok’s problems in the specified country. As a result of this deal, the giant of the social media industry gets access to a large local trading base of the brand it acquired, powerful payment and logistics assets, and connections with Indonesian regulators and other interested government agencies. This was announced in December during a conversation with media representatives by Simon Torring, co-founder of the e-commerce research platform Cube Asia.
