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China’s leading social media platform, TikTok, has announced an investment of $1.5B to acquire a controlling stake in the e-commerce division of Indonesia’s GoTo Gojek Tokopedia. The move comes as TikTok attempts to relaunch its online shopping business, which was previously suspended by regulators in Indonesia.

  • Previously: In October, Indonesia imposed a ban on online shopping on social media platforms, aiming to protect small-scale merchants and users’ data. Consequently, TikTok had to shut down its e-commerce service, TikTok Shop. Shares of GoTo, a multifaceted business offering ride-hailing, delivery, and financial services, fell by 8.3% following the announcement.
  • What’s The Deal: TikTok will acquire a 75.01% stake in GoTo’s Tokopedia, Indonesia’s largest e-commerce platform, for $840M and incorporate TikTok Shop’s Indonesia business into the expanded Tokopedia entity.
  • Future Outlook: The transaction is slated for completion by Q1 2024 and TikTok has committed to investing an additional $1.5B into the enlarged entity in the future, ensuring necessary funding without further dilution to GoTo.

TikTok, owned by China’s ByteDance, has 124 million users in Indonesia and aims to transform this massive user base into a significant e-commerce revenue source. Meanwhile, Tokopedia operates in Indonesia’s competitive e-commerce market, which also includes Singapore’s Shopee and Chinese e-commerce giant Alibaba’s Lazada.

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