NEWS ALERT: GoTo Initiates Partnership with TikTok

PT GoTo Gojek Tokopedia, Tbk. (“GoTo”) has just announced its partnership with TikTok, the global short video platform. This came after the Ministry of Trade of Indonesia restricted transactions on social media platforms this October.

Following the issuance of Ministry of Trade Regulation No. 31/2023 that restricts social media platform to facilitate any transactions on their platform, TikTok was forced to close its TikTok Shop. It seems that the partnership with Tokopedia is an effort to stay in the Indonesian e-commerce market.

In a joint announcement by GoTo and TikTok, Tokopedia and TikTok Shop will merge into a single e-commerce platform under the existing Tokopedia name. It is said that TikTok will acquire 75,01% of Tokopedia’s shares and the rest of the shares would still be owned by GoTo. The deal is valued at over $1,5 billion and is expected to be closed by the first quarter of 2024.

The union of these two applications, according to the joint announcement, will result in more than 90% of its merchants being small medium enterprises (“SME) merchants. This would enlarge access for SMEs to do their business via e-commerce. Those merchants, as promised by GoTo and TikTok, will receive various support from the platform, namely:

1. Promoting Indonesian products on Tokopedia and TikTok;

2. Enhancing the capacity and competency of Indonesian SME merchants through comprehensive programs that stimulate skill development and increase access to resources, from upstream (production stage) to downstream (sales);

3. Marketing, branding, and sustainable business practices assistance for merchants to help them do their business online;

4. Supporting local business actors to market their products abroad;

5. The creation of technology hubs in various places in Indonesia to enchance Indonesian tech workforce; and

6. Shaping a marketplace that encourages fair competition among merchants.

TikTok, owned by ByteDance, currently has around 124 million users in Indonesia and is looking to take part in the e-commerce market. This new Tokopedia-TikTok Shop will compete with other giants in the Indonesian e-commerce market, Shopee (owned by Sea Ltd.) and Lazada (owned by Alibaba Group). It would be fascinating to see how those competitors would react to the integration of these two large platforms in the ever-growing market that is Indonesia.

By: Nicole Huang and Rizky Akbar Idris

DISCLAIMER:

This material is prepared for general information purposes only. It is not intended to give legal or any other professional advice, opinion or recommendation and, accordingly, it should not be relied upon. Specific legal advice should be sought before taking any action based on the contents in this material. Please contact us if you need any assistance regarding this matter.