TikTok Takes Control of Tokopedia with $1.5 Billion Investment
In a strategic move to strengthen its position in the online shopping landscape of Southeast Asia, TikTok has unveiled plans to invest a significant $1.5 billion to acquire a controlling stake in Tokopedia, the prominent e-commerce marketplace under Indonesia’s PT GoTo Gojek Tokopedia Tbk.
This collaboration between TikTok and Tokopedia, the two foremost online platforms in the country, is aimed at rejuvenating the e-commerce operations of TikTok, a Bytedance-owned platform. TikTok had faced regulatory challenges in Indonesia, the largest economy in the region, resulting in a halt to its e-commerce initiatives.
The decision by Indonesia in October 2023 to restrict online shopping on social media platforms was intended to protect smaller retailers and user data privacy. Consequently, TikTok Shop, the platform’s e-commerce service launched earlier in limited markets, including Indonesia, was suspended.
TikTok Shop was a crucial element in TikTok’s strategy to leverage its extensive user base and compete with rapidly growing online sellers like Shein and PDD Holdings’ Temu, both of which capitalized on TikTok for effective marketing.
Under the new agreement, TikTok will acquire a 75.01% stake in Tokopedia, Indonesia’s largest e-commerce platform, at a cost of $840 million. Additionally, TikTok Shop’s operations in Indonesia will be seamlessly integrated into the expanded Tokopedia entity.
The announcement triggered an 8.3% drop in shares of GoTo, a company with a diverse portfolio spanning ride-hailing, delivery, and financial services. Some attributed this response to profit-taking following a recent surge in anticipation of the TikTok deal.
Both companies, in a joint statement on Monday, emphasized their commitment to a pilot phase for the partnership, to be closely coordinated with and supervised by relevant regulatory bodies. This move underscores TikTok’s persistent ambition to penetrate the e-commerce market and its adaptability in navigating diverse regulatory landscapes.
When is the anticipated availability of the TikTok Shop feature in Cambodia? There’s no news of the availability of TikTok Shop in Cambodia yet. If there is any feature of TikTok Shop makes available, TikTik will implement it with the agency account first before rolling out to the public. However, it highlights TikTok’s ongoing efforts to expand its e-commerce services into different regions, showcasing its determination to overcome regulatory challenges and tap into diverse markets.