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TikTok marks e-commerce return with $1.5 billion deal to acquire Tokopedia
The deal would reshape the competitive landscape in the country and put rival Sea Group's e-commerce arm Shopee in a “tricky, defensive position", said an analyst.
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Screened: A Jakarta resident watches a live stream on Sept. 26, 2023, in which a seller offers her products on TikTok. Trade Minister Zulkifli Hasan has revised a ministerial regulation that bans transactions on social media. (Antara/Aditya Pradana Putra)
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hinese video platform Tiktok is set to invest US$1.5 billion in Tokopedia, the homegrown e-commerce platform of tech giant GoTo, in a move that experts say is to save its e-commerce operation in Indonesia.
The deal would allow TikTok to acquire 75.01 percent of Tokopedia for $840 million, while GoTo would retain the remaining ownership, according to GoTo’s disclosure.
Tokopedia will gain full ownership of TikTok Shop for $340 million in a transaction that is slated to be completed in first quarter of next year.
TikTok also pledged to inject another $1 billion into Tokopedia, which it will use to support working capital of the newly acquired entity, though a specific timeline for this investment was undisclosed.
Both parties have agreed that GoTo’s ownership of Tokopedia will remain unaltered by any subsequent funding from TikTok, as outlined in the disclosure.
TikTok made the move just two months after the government imposed a new regulation in October that forced the video platform to stop transactions on its e-commerce app, TikTok Shop. Malaysia has expressed its intention to follow similar steps.
Indonesia was the second-biggest market for TikTok Shop after the United States, before its closure.
