On December 11, TikTok and Goto Group reached an e-commerce strategic cooperation. TikTok e-commerce, which was previously banned locally, will also be relaunched on Indonesia's National Online Shopping Day on Double 12. The return of TikTok Shop may mean a reshuffle of e-commerce in Southeast Asia.
Produced by: B2B and Cross-border E-commerce Department.
Author June.
Reviewed by Yunma.
1. Invest 1.5 billion US dollars to reach an e-commerce strategic cooperation with GOTO Group
It is reported that TikTok's Indonesian e-commerce business will be merged with Tokopedia, an e-commerce platform under the Goto Group, and the merged entity will be 75% owned and controlled by TikTok. TikTok has also pledged to invest $1.5 billion in the coming years to fund the business. TikTok said the two sides will work together to promote the development of Indonesia's digital economy and support small and medium-sized enterprises. On the day of the resumption of the launch, TikTok and Tokopedia will jointly launch the "Buy Local Products" (Beli Lokal) campaign.
As part of the strategic partnership, Tokopedia and TikTok Shop Indonesia operations will be merged under PT Tokopedia, with TikTok taking control of PT Tokopedia. The shopping service function in the TikTok app in Indonesia will be operated and managed by PT Tokopedia.
Goto is Indonesia's largest internet technology company, 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%. Tokopedia has been in the spotlight since its inception in 2009, and in 2014 became the first technology company in Southeast Asia to raise more than US$100 millionIts total financing amount has exceeded $2.3 billion.
Guo Tao, a special researcher at the E-commerce Research Center of the Network Economic Society, an angel investor and a well-known Internet expert, saidThe merger of TikTok with Tokopedia, a local e-commerce platform in Indonesia, will allow TikTok to further expand its presence in the e-commerce space and leverage Tokopedia's leading position in the Indonesian market to drive the growth of its e-commerce business. By partnering with Tokopedia, TikTok can leverage Tokopedia's user base and market channels to reach more consumers. In addition, Tokopedia's popularity and credibility in the Indonesian market will also help boost TikTok Shop's brand recognition and user trust.
Zhu Qiucheng, a special researcher at the E-commerce Research Center of the Network Economic Society and CEO of Ningbo New Oriental Industry and Trade, said that TikTok is obviously more intelligent and rational to develop the Indonesian market by holding local e-commerce platforms, and it is also the most feasible solution for TikTok to find the Indonesian market.
Wang Youjian, a special researcher at the E-commerce Research Center of the Network Economic Society, saidAfter TikTok controls Indonesia's local e-commerce platform Tokopedia, it has entered the largest cross-border e-commerce market in Southeast Asia through PT Tokopedia, benefiting from the local language and cultural advantages, and will establish its position in TikTok Shop.
2. "Double 12" returns to Indonesia "Localization" is king
On September 25, Indonesia** issued a decree called Ministerial Regulation No. 31 of 2023 (REG31 2023), according to which social media will be prohibited from being used as a sales platform for goods and can only be used for the promotion of goods or services.
Affected by this, on October 4, TikTok Shop officially announced that it would officially close its e-commerce transaction service at 17 o'clock Western Indonesia time. After that, TikTok in the Indonesian market will become a short content platform that no longer has an "e-commerce function", and sellers can continue to create and share content on the TikTok platform to promote products, but they will not be able to sell products directly on the platform.
As early as July this year, Indef, an Indonesian think tank, criticized the "proliferation of Chinese products on TikTok" at a cabinet meeting, posing a threat to local companiesIndonesia's SME minister, Teten Masduki, has repeatedly accused Chinese companies of being too cheap to compete.
Zhu Qiucheng said that TikTok should pay more attention to the experience, quality brand and localization in addition to low price, and the second return of TikTok should enhance its advantages and avoid a simple low-** model.
According to third-party data, TikTok has 3 users in Southeast Asia2.5 billion, of which about 12.4 billion came from Indonesia, second only to the United States. According to the "TikTok Ecological Development in the First Half of 2023***" released by Fastdata, Indonesia is the country with the largest number of small stores with sales of more than 10,000 on the TikTok platform, and it is also the country with the highest total duration and total number of TikTok live broadcasts.
TikTok as the representative of the social **,Truly help local small and medium-sized enterprises to find employment and develop the economy. Short** content marketing must be the world's largest traffic trend, through the development of business through TikTok, Indonesian merchants also deeply understand, when it was banned, it was dissatisfied with local merchants and some **. By holding a local e-commerce platform, the two sides are more integrated and their interests are more balanced, which is in line with the long-term development interests of small and medium-sized enterprisesZhu Qiucheng thinks.
Today, TikTok Shop Indonesia has officially resumed its launch. Starting from 9:00 Indonesian time on December 11, 2023, merchants can access the merchant center and manage their products. Users will be able to purchase products on December 12, 2023 on the TikTok page, short and live channels.
However, the merger also faces some challenges and risks. First, TikTok needed to ensure that the quality and user experience of its e-commerce business met consumer expectations, including providing a secure and reliable payment system and efficient logistics services. In addition, TikTok also needs to work closely with Tokopedia to ensure that the integration of the two platforms goes smoothly and avoids any potential conflicts or competition. In addition, the merger is likely to attract regulatory attention and scrutiny. For example, concerns about data security and antitrust issues. Therefore, TikTok needs to actively communicate with relevant regulators and take necessary measures to ensure the legitimacy and transparency of cooperation, Guo Tao said.
Wang and Jian said,Subject to factors such as category restrictions and local enterprise protection policies, cross-border platforms rely on limited ceilings for goods to go overseas, and breakthroughs can only be made by including local merchants' products and fully localization. TikTok entered the country by taking a stake in Tokopedia, a local e-commerce platform in Indonesia. In the future, the implementation of localization in warehousing and ** chain, and at the same time fully authorizing local management to integrate into the market, will also become a common model for Chinese e-commerce platforms to go overseas.
3. Emerging e-commerce markets such as Indonesia have both opportunities and challenges
In recent years, the domestic e-commerce market has become saturated, and more and more e-commerce platforms have begun to look to overseas markets for new growth opportunities. As one of the important and dynamic markets in Southeast Asia, Indonesia has always been favored by major e-commerce platforms. Indonesia has a young population and rapid Internet development, and is one of the countries with the largest number of Internet users in the world.
Data shows that from 2012 to 2022, the total sales of e-commerce in Indonesia increased from 1$400 million increased to $15.6 billion, or about 34%。According to Statista, Indonesia expects the e-commerce market to reach US$1,319 billion in 2023 and revenue to reach US$45 billion. Most of the revenue comes from China.
At present, as more e-commerce platforms enter, the Indonesian market will become more competitive. In addition to TikTok, players in Indonesia's e-commerce market include local e-commerce platforms such as Lazada, Tokopedia and Shopee, as well as international e-commerce giants such as Amazon and Alibaba. The return of TikTok may also have an impact on the local competitive landscape. The addition of TikTok is likely to make the competition even more intense. For other e-commerce platforms, they need to work harder to improve their competitiveness to meet the needs of users and maintain their market position.
Guo Tao said that through the partnership with Tokopedia, TikTok can further expand its business scope in the Indonesian market and provide more shopping options and services, which will help increase TikTok's revenue** and improve its competitiveness in the global e-commerce sector.
Zhu Qiucheng saidThe short social network represented by TikTok must be the general trend of the futureRather than banning, it is more important to comply with compliance and win-win guidance. Previously, Indonesia's ** minister stated that he agreed to let TikTok e-commerce return in order to "let social e-commerce support Indonesia's economic growth".
Together with the GOTO Group, TikTok will provide a series of support in 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. Obviously, such a model is more in line with the interests of the platform and local economic development, and win-win and sustainable growth is the way to development, Zhu Qiucheng said.
However, on the other hand,Southeast Asia, the Middle East and other emerging regions as the representative of low purchasing power, infrastructure is not perfect, e-commerce started after 2010, the plate is small, in the long run, to achieve profitability has a long way to goWang and Jian said,