On the morning of Monday, December 11, two companies, TikTok and Tokopedia, said that the TikTok Shop business will merge with Goto's e-commerce platform, Tokopedia. For more details, please see: Boom!Indonesian TikTok officially announced: take over the operation of Tokopedia!Acquisition of 75% stake!The first big sale is about to start!
It is worth mentioning that after thatGoto has also released a statement on its partnership with TikTok:
1. TikTok's commitment to gradually invest more than US$1.5 billion in Tokepedia to provide the capital needed for the business and not further dilute GoTo's equity will enable TikTok and Goto to serve Indonesian consumers and MSMEs more comprehensively.
2. GOTO will benefit from the growth of the expanded entity and will continue to be an ecosystem partner of Tokopedia through Goto Financial's digital financial services and GoJek's on-demand services.
3. GOTO will receive a consistent revenue stream from Tokopedia commensurate with its size.
The strategic partnership between the two companies will enter a pilot phase in close consultation and supervision with the relevant regulators, with the first event being the Beli Local Festival**, which will be launched on December 12 to coincide with Indonesia's National Online Shopping Day (Harbolnas), a program aimed at developing Indonesia's digital economy by supporting local micro, small and medium-sized enterprises. The campaign will take place on TikTok and Tokopedia and will be widely promoted to every merchant.
The following picture shows the original text and translation of the statement
The Buy Local campaign, which appears on the Tokopedia and TikTok apps, will promote various types of merchants, with a focus on goods from Indonesia. The "Buy Local" program on the TikTok app is designed to guide TikTok users to buy and interact with their favorite local Indonesian products. It is noted that at present, the TikTok Shop seller panel can already see the display of Tokopedia's logo.
In the future, TikTok, Tokopedia and Goto Group will be committed to providing broader benefits to Indonesia's MSMEs, driving Indonesia's economy and creating millions of new jobs over the next five years. It is worth noting that after the merger of the two enterprises, more than 90% of the merchants are micro, small and medium-sized enterprises. These MSMEs will be supported through various programs of TikTok, Tokopedia, and Goto Group in the form of:
1. SMEs can promote Indonesian products on Tokopedia and TikTok platforms;
2. MSMEs Upstream – Encourage Indonesian MSME participants to improve their ability to create profitability through integrated programs that encourage skill development and access to resources from upstream (production stage) to downstream (sales);
3. The platform supports marketing, brand promotion and sustainable business practices of leading merchants
4. The platform supports local enterprises to promote their products in the international market
5. Set up digital talent development centers throughout Indonesia to ensure a level playing field.
The full text of Goto's contribution to investors is as follows:
Dear Investors and Partners:
We are excited to announce a groundbreaking strategic partnership with TikTok that will accelerate our e-commerce business and ultimately become an e-commerce leader, while driving the growth of Indonesia's Micro, Small and Medium Enterprises (MSMEs) and the digital economy as a whole."
Management has conducted a thorough analysis and obtained unanimous approval from our Board of Directors and Board of Directors. Key considerations include:
Non-dilutive equity in the expanded e-commerce business:Goto will remain in the expanded Tokopedia entity for 2499% equity, which will not be diluted by TikTok's future funds. By working together, Tokopedia and TikTok will work together to become e-commerce leaders. In the recovery mentioned by Tokopedia in our last quarterly results** meeting, TikTok's global strength will provide key support to this effort, adapting it to changing competitive dynamics;
Reliable, Growing and Sustainable Income Streams:Not only will Goto no longer need to fund Tokopedia, but GoTo will also receive an ongoing revenue stream from Tokopedia commensurate with its size and growth, which will directly contribute to our EBITDA. It also means that we will continue to directly benefit from the rapid growth of Indonesia's e-commerce sector, while enabling Goto to direct resources and capital to its market-leading instant services business, which is on track to achieve positive adjusted EBITDA in Q4 2023, and our financial technology business, which remains strong in the GoPay app and consumer lending with Bank Jago;
Take advantage of live commerce opportunities:Another important consideration is the growing importance of live commerce in the region. This is especially relevant in Indonesia, where TikTok is its second largest market with high social ** penetration. Having a platform that can attract these users, many of whom are young and first-time e-commerce users, is crucial. The transaction means that Tokopedia will immediately have this social element with zero cost and zero execution risk;
Complementary use cases and a larger user base:This collaboration is highly complementary, as there is no significant overlap in the user bases of the two companies. TikTok caters to the needs of the mass market and drives impulse buying with engaging content created primarily by influencers in the fashion and beauty space. Tokopedia, on the other hand, satisfies the needs of affluent intending buyers with a variety of categories of goods and high transaction reliability. TikTok has a large monthly active user base in Indonesia, providing Tokopedia and Goto with a valuable top funnel to convert and cross-sell across various product categories. This, in turn, will benefit sellers as they participate in a versatile e-commerce ecosystem that caters to an extremely broad customer base.
Exciting partnership opportunities:GOTO will benefit from an ongoing strategic partnership with the expanded Tokopedia entity to provide digital financial services through Goto Financial and our strategic partner Bank Jago, as well as delivery services through GOJEK for a wider user base. There are opportunities between our fintech business and the expanded Tokopedia entity, including the GoPay payment product, the GoPayLater loan product, and the related banking services offered by Bank Jago. Goto and TikTok also have opportunities to collaborate in other areas.
This strategic partnership will commence during a pilot period in close consultation and oversight with the relevant regulatory authorities. The first event will be the "Beli Lokal" (Buy Local Products) initiative, which will be launched on December 12 in conjunction with Indonesia's National Shopping Day (Harbolnas), a program aimed at promoting the growth of Indonesia's digital economy by supporting local MSMES.
We believe this partnership will propel our company to the next phase of growth, making the combined entity a leading e-commerce business, supporting the livelihoods of hundreds of thousands of MSMESs across the country, and setting up a technology center in Indonesia to nurture local tech talent." This collaboration will greatly enhance the value of the GOTO Group and marks another step in our mission to empower all stakeholders in the ecosystem." I believe that the cooperation between the two giants will undergo great changes in the Indonesian e-commerce field in the near future, and this is also an indispensable part of TikTok's further opening up the Southeast Asian market through such a "curve" and roundabout way. What changes will happen to the main features of TikTok Shop after working with Tokopedia?**Will continue to be shared tomorrow.