GoTo And TikTok Will Comply With Regulations In Indonesia In One And A Half Month

JAKARTA - The technology company Indonesia, GoTo, and partners owned by Chinese company TikTok will fully comply with Southeast Asian regulations, including Indonesia, which prohibits transactions in applications on social media within a month and a half. This was said by the CEO of GoTo on Wednesday, February 28.

The short video app TikTok acquired a majority stake in GoTo's e-commerce unit, Tokopedia, after the Indonesian Ministry of Trade banned transactions in its TikTok Shop e-commerce unit in December.

"The integration process is running smoothly. All parties continue to communicate with the relevant ministries and as far as we know, the process is approaching completion," said GoTo CEO Patrick Walujo.

Minister of Cooperatives and MSMEs, Teten Masduki, said last week that TikTok had not complied with the regulations. TikTok, which is owned by Chinese company ByteDance, is not yet willing to respond to the statement. After the agreement in December, TikTok has reopened its e-commerce service, which is now facilitated by Tokopedia.

Previously, Teten stated that TikTok violated the Regulation of the Minister of Trade (Permendag) Number 31 of 2023 concerning Business Licensing, Advertising, Development, and Supervision of Business Actors in Trade Through Electronic Systems. This rule prohibits social commerce, such as the one practiced by TikTok Shop.

Teten emphasized that his party had no problem with TikTok currently working with Tokopedia. However, he regretted that TikTok Shop was still operating in the same way before it was banned from operating, where transactions were still on the platform itself.

"We don't mind TikTok investing in its Tokopedia, which we are concerned about TikTok in practice still using TikTok Shop is integrated with social media," said Teten.

GoTo management told the media that they will receive quarterly e-commerce fees from Tokopedia, with the amount depending on the value of Tokopedia's gross merchandise.

"Based on the value of gross merchandise of IDR 45.3 trillion which was recorded in the third quarter of last year, the cost of e-commerce services for GoTo will be IDR 178.3 billion," said GoTo.

GoTo also expects its partnership with TikTok to benefit not only their e-commerce business but also their financial services segment because they will be able to offer digital payments and credit schemes "buy now, pay later" on TikTok.