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ByteDance’s TikTok is negotiating investment matters with a subsidiary of Indonesia’s GoTo Group, possibly in the form of a joint venture. The two companies are considering investing in Tokopedia, a subsidiary of GoTo, to restart TikTok’s online store in Indonesia’s largest e-commerce market.
The Indonesian government issued regulations in September requiring TikTok to separate payment and shopping, weakening its e-commerce development momentum. The transaction remains under review and is subject to regulatory approvals. A direct investment in Tokopedia could help improve TikTok’s relationship with the government. TikTok has been trying to cooperate with government officials and other companies to restart its e-commerce business in Indonesia.
The transaction may be risky for GoTo, but it will also increase shopping and payment volumes for both companies. Indonesia is TikTok Shop’s largest market, and online shopping is the app’s fastest-growing feature. TikTok launched a shopping function in Indonesia in 2021 and expanded to other markets after its success.
Indonesia was one of the first countries in Southeast Asia to boycott TikTok, and neighboring Malaysia is also studying the possibility of regulating TikTok and its e-commerce business.
(Source: Bloomberg Image source: freepik)
