Indonesia: Chinese social media app TikTok has announced a deal with Indonesian tech giant GoTo group to restart its online shop in the country.
The firm, owned by China’s Bytedance, plans to invest over $1.5 billion in the GoTo. TikTok Shop closed its doors in Indonesia in October to comply with new rules in South East Asia’s largest economy.
Under the deal, TikTok Shop will be merged into GoTo’s Tokopedia, and it will own a majority stake in that entity.
GoTo stated that, “TikTok has committed to invest over US $1.5 billion in the enlarged entity over time, to provide future funding required by the business, without additional dilution to GoTo.”
“TikTok, Tokopedia, and GoTo will transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years,” the Indonesian firm added.
The agreement was reached when the Indonesian government banned online shopping on social media platforms to protect smaller merchants and users’ data.
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“The strategic partnership will commence with a pilot period carried out in close consultation with and supervision by the relevant regulators,” the two companies said in a joint statement.
According to company figures, TikTok has around 125 million users in Indonesia. The announcement of the ban came after Indonesia’s President, Mr. Joko Widodo remarked that, “We need to be careful with e-commerce. It can be very good if there are regulations but can turn bad if there aren’t any regulations.”
TikTok Shop has been growing its market share since its launch two years ago in Indonesia’s online shopping market, which is dominated by platforms such as Tokopedia, Shopee, and Lazada.