TikTok is reportedly considering an investment into Tokopedia, a unit of Indonesia’s GoTo Group, to revive its e-commerce service in Southeast Asia’s largest retail market.
According to a Bloomberg report, TikTok is currently in talks to invest in GoTo’s online retail unit Tokopedia and jointly build a new e-commerce platform, after the social media company was forced to suspend its e-commerce operations in Indonesia due to fresh government restrictions.
People with knowledge of the matter suggest that the investment might take the form of a joint venture. This way, TikTok may be able to comply with regulatory requirements and revive its online shopping service which was halted in October.
In September, Indonesia introduced sweeping regulation changes. That forced TikTok to split the payments business from its social media platform in the country. The government’s social media e-commerce ban was allegedly motivated by the fact that TikTok and other social media platforms e.g. Meta used “predatory pricing” practices, introducing much lower prices than local retail businesses. It had, in government opinion, caused substantial harm to local small- and medium-sized businesses.
According to the new rules, social commerce can be used solely for the promotion of goods and services, or conducting market surveys, but not online sales with linked in-app transactions.
A potential tie-up between TikTok and Tokopedia can help the social media giant overcome regulatory hurdles and find alternative ways to cater to Southeast Asia’s largest retail market. At the same time, the pact-to-be would still be subject to regulatory approval.
It was earlier reported that TikTok was negotiating with regulators in Indonesia in order to obtain a payment license in this country.