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MoT: TikTok-Tokopedia Migration Achieved Substantial Progress, Reaches Three-Quarters Mark
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(Courtesy of TJP)
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he Ministry of Trade (MoT) has recently unveiled a noteworthy announcement pertaining to the ongoing integration process of the TikTok Tokopedia system. According to MoT, this integration process has now reached a milestone, with three-quarters of the journey completed. This essentially means that the transition or migration process from the previous system to the new one is now 75 percent finalized, while the entire migration process was slated for completion by April.
Isy Karim, the Director General of Domestic Trade at the Ministry of Trade (MoT), has provided reassurance by affirming that the back-end migration is progressing smoothly and on track, in accordance with the initial target set by Minister Zulkifli Hasan. Isy underscored that MoT is actively overseeing the process to ensure adherence to regulations. Despite the ongoing efforts to meet regulatory standards, Isy highlighted the substantial progress achieved in the migration process, estimating it to be three-quarters complete.
“At the moment we continue to oversee the TikTok-Tokopedia integration to ensure adherence to regulations. According to the report, approximately a quarter of the integration process has been completed as of the latest progress meeting earlier this month,” said Isy to the Jakarta Post, Wednesday (21/2).
Currently, all transaction payment processes have been conducted seamlessly on the back of the Tokopedia system. However, the migration of back-end functionalities, particularly tailored for sellers (merchants), is still underway. Nonetheless, there's already discernible evidence of transition to applications directly managed by Tokopedia. Isy reiterated MoT's commitment to closely monitor the electronic system and transactions on both platforms' partnership applications, ensuring a smooth and compliant integration process.
Once the transition process reaches completion, Tokopedia will seamlessly integrate into the transaction payment system on TikTok Shop. Crucially this integration will occur behind the scenes, ensuring a seamless experience for buyers without any noticeable disruptions. MoT remains actively engaged in overseeing the process to guarantee adherence to regulations.
In December 2023, Trade Minister Zulkifli Hasan (Zulhas) revealed that the government’s efforts to regulate e-commerce was realized by the steps taken by a collaboration between TikTok and Tokopedia, promising substantial benefits for Indonesia.
"Hopefully what the government is doing with Tokopedia and TikTok and others will help the advancement of [e-commerce] ecosystem to really provide great benefits for the progress of SMEs and industry, for the economic progress of the country," said the Minister of Trade, opening Buy Local 12.12 event held by TikTok-Tokopedia, in Jakarta on Tuesday (12/12/2023).
According to the minister, the government granted a transition period of around three to four months, or until April 2024 after their collaboration.
"Let me explain first, this is Tokopedia's e-commerce collaboration with TikTok, the e-commerce is [via] Tokopedia, we are giving it a three-to-four-month trial period because technology [synergy] is not easy," said the Minister of Trade.
At the end of last January 2024, PT GoTo Gojek Tokopedia Tbk (GOTO) and TikTok announced the completion of their previously announced transaction. Based on public disclosure on the Indonesian Stock Exchange (BEI), Wednesday (31/1), the transaction was TikTok's investment in Tokopedia, which makes TikTok hold 75% of Tokopedia's shares
This strategic partnership consists of three schemes. First, Tokopedia bought the assets of TikTok Shop which operates in Indonesia for 340 million USD. Second, TikTok took 75.01% of the new shares issued by Tokopedia worth 840 million USD, and third, Tokopedia will receive Promissory Notes from TikTok worth 1 billion USD which will be used as working capital.
GoTo management explained that the Tokopedia and TikTok Shop Indonesia businesses will be merged under PT Tokopedia, which is now jointly owned by GoTo and TikTok as strategic partners in Indonesia.
“Today marks the completion of a partnership with TikTok that will continue to bring benefits to Indonesia and its MSMEs. It is also a big step forward for GoTo Group. Having reached positive adjusted EBITDA for the fourth quarter of 2023, we can now look forward to accelerating our progress, driven in part by supportive ecosystem partners,” said GoTo Group CEO, Patrick Walujo in a press release.
Executive Director, E-commerce, TikTok Indonesia, Stephanie Susilo added that the party was proud to be able to officially welcome Tokopedia, along with its stakeholders and all its components. "We view this moment as an important achievement in realizing our commitment to contribute further to Indonesia’s MSME industry, and the growth of the digital economy together with GoTo as our partner," she said.
