Official! TikTok Shop Enters Tokopedia With Investment Of 1.5 Billion US Dollars

TikTok Shop (Photo: dock. Antara)

JAKARTA - PT GoTo Gojek Tokopedia Tbk (GOTO) and TikTok have established strategic partnership cooperation to strengthen Indonesia's digital economy growth.

This collaboration will focus on empowering and expanding the market for national MSME players.

As part of this strategic partnership, the Tokopedia and TikTok Shop Indonesia businesses will be combined under Tokopedia, where TikTok will have control over Tokopedia.

Meanwhile, the shopping service feature in the TikTok application in Indonesia will be operated and managed by Tokopedia.

On the other hand, TikTok will invest more than $1.5 billion, as a long-term commitment to supporting Tokopedia's operations, without further dilution on GoTo's ownership in Tokopedia.

Through this agreement, TikTok and GoTo can expand the benefits for Indonesian MSME users and actors.

Tokopedia's business growth after being combined with TikTok Shop Indonesia will bring benefits to GoTo, which will remain an ecosystem partner for Tokopedia, including reaching a wider market with digital financial services through GoTo Financial and on-demand services from Gojek.

In addition, GoTo will also receive revenue from Tokopedia in line with the company's scale and growth.

This strategic partnership will begin with a trial period carried out by consultation and supervision from the relevant ministries and institutions.

Furthermore, the program that will be launched during this trial period is the Beli Lokal campaign starting on December 12, 2023, coinciding with National Online Shopping Day (Harbolnas), an initiative of the Indonesian government aimed at encouraging digital economic growth through the empowerment of local MSMEs.

Present on the Tokopedia and TikTok apps, the Local Buying campaign will promote different types of merchants, with a major focus on products from Indonesia. Local Buying Program on the TikTok app, will allow TikTok users to shop and interact with their favorite local products.

In the future, TikTok, Tokopedia, and the GoTo Group are committed to providing wider benefits for MSME players in Indonesia by utilizing the e-commerce platform, and encouraging the creation of millions of new jobs in the next five years.

With the merger of the two businesses, more than 90 percent of merchants are MSME players. The MSME players will get support through various programs from TikTok, Tokopedia and GoTo Groups.

The transaction is expected to be completed in the first quarter of 2024. This agreement is in line with the GoTo Group's move to strengthen the Company's financial position and strategy to expand the total addressable market coverage.

To ensure Tokopedia's continued steps in encouraging the development of the national digital economy, a committee will be formed to facilitate the transition and integration chaired by Patrick Walujo, with the support of Tokopedia and TikTok representatives.

In this transaction, Goldman Sachs acted as financial advisor for the GoTo Group.