On December 11, TikTok reached an e-commerce strategic partnership with Indonesian technology company Goto. Under the agreement, the businesses of Tokopedia and TikTok Shop Indonesia will be integrated under the existing PT Tokopedia entity, and TikTok will have a controlling stake. The shopping feature within the TikTok app in Indonesia will be operated and maintained by the expanded entity.
TikTok has also pledged $1.5 billion to fund future business development.
At the same time, TikTok announced that Indonesia's e-commerce business will officially resume online on "Double 12".
It is understood that Goto is the largest Internet technology company in Indonesia, with Indonesia's local e-commerce platform Tokopedia and mobile service platform Gojek. Tokopedia is Indonesia's largest homegrown e-commerce company with a market share of 35% and has raised more than US$2.3 billion.
TikTok said in a statement that it will work with the GOTO Group to provide a series of support in local products, marketing, branding and internationalization to help local small and medium-sized businesses develop. On the day of the resumption of the launch, TikTok and Tokopedia will also jointly launch the "Buy Local Products" (Beli Lokal) campaign to help the development of local businesses in Indonesia.
The following is the full text of the official announcement:
Goto Gojek Tokopedia TBK ("GOTO"), a leader in Indonesia's digital ecosystem, and TikTok, a leading global entertainment platform, today announced a strategic partnership to jointly drive long-term growth in Indonesia's micro, small and medium-sized enterprises (MSMEs) sector and the digital economy as a whole.
Under the agreement, the businesses of Tokopedia and TikTok Shop Indonesia will be integrated under the existing PT Tokopedia entity, and TikTok will have a controlling stake. The shopping feature within the TikTok app in Indonesia will be operated and maintained by the expanded entity.
TikTok has pledged to invest more than $1.5 billion in the next month to fund the business without diluting Goto's stake. This arrangement will allow TikTok and GOTO to more comprehensively serve Indonesian consumers and MSMEs.
Through Goto Financial's digital financial services and GoJek's instant services, Goto will benefit from the growth of the expanded entity and will continue to be an ecosystem partner of Tokopedia. Goto will also derive a consistent revenue stream from Tokopedia's size and growth.
The strategic partnership will begin the pilot phase in close consultation and oversight with the relevant regulatory authorities. The first event will be the Beli Lokal (Buy Local Products) program, which was launched on December 12 to coincide with Indonesia's National Shopping Day (Harbolnas), a project in Indonesia that aims to grow the digital economy by supporting local MSMEs. The campaign will be launched on TikTok and Tokopedia, with a focus on promoting a wide range of merchants, with a special focus on Indonesian products. The Beli Lokal campaign on TikTok will enable its community to interact and shop with local businesses they are familiar with.
In the future, TikTok, Tokopedia and Goto will transform Indonesia's e-commerce industry, creating millions of new jobs over the next five years. More than 90% of the combined business merchants are MSMEs, and the two companies will take a series of joint initiatives to support them, including:
1.Promote Indonesian products on Tokopedia and TikTok platforms.
2.Empower MSMEs in Indonesia through a comprehensive program that focuses on skills development and provides resources related to upstream production and sales.
3.Help merchants** sell their products by providing support in marketing, branding, and sustainable business practices.
4.Assist local brands to promote their products in the international market.
5.Establish technical centers throughout Indonesia to train local technical talents.
6.Ensuring a market that promotes fair competition.
The transaction is expected to close in the first quarter of 2024. To ensure that PT Tokopedia's business continues to be in the best interests of Indonesia's digital economy, an expanded entity committee will be set up to facilitate the transition and integration, chaired by Goto Group CEO Patrick Walujo and supported by members of both companies. Goldman Sachs will act as financial advisor to Goto Group in the transaction.