TikTok To Acquire GoTo’s Indonesia E-Commerce Business For $1.5 Billion.

(CTN News) – Indonesia’s largest tech firm, PT GoTo Gojek Tokopedia (GOTO.JK), has announced a significant partnership with TikTok.

As part of the deal, TikTok will acquire a controlling stake of 75.01% in GoTo’s PT Tokopedia, the country’s leading e-commerce platform.

This strategic collaboration will involve a long-term investment of $1.5 billion from TikTok, aimed at leveraging its vast user base of 124 million in Indonesia to generate substantial e-commerce revenue.

The agreement also includes the integration of TikTok Shop’s Indonesia business into the expanded Tokopedia entity.

To ensure compliance with regulations, the partnership will commence with a pilot period under the close consultation and supervision of relevant regulators.

This move comes in the wake of Indonesia’s ban on online shopping via social media platforms, which prompted TikTok to shut down its e-commerce service.

With over 270 million active social media users in Indonesia, this partnership holds significant potential for both companies.

The first quarter of 2024 will mark the completion of the transactions, and TikTok will provide Tokopedia with a $1 billion promissory note that can be utilized for working capital needs, as stated.

The commitment from entails an investment of over $1.5 billion in the expanded entity, ensuring future funding for the business without diluting GoTo further, according to the statement.

Following the announcement, GoTo’s shares, which encompass ride-hailing, delivery, and financial services, experienced an 8.3% decline as some investors capitalized on the recent surge in share prices, driven by expectations of a TikTok deal.

In Indonesia’s e-commerce market, Tokopedia competes with Shopee from Sea and Alibaba’s Lazada. A report by Google, Singapore state investor Temasek Holdings, and consultancy Bain & Co. predicts that the industry will grow from $62 billion this year to approximately $160 billion by 2030.

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