Multimedia short video streaming platform TikTok’s parent company ByteDance has agreed to invest USD 1.5 billion in a joint venture (JV) with Indonesia’s GoTo Group. With this deal, the Chinese company can restart its shopping app in its biggest online-retail market.
Under the joint venture, TikTok Shop business will be combined with GoTo’s e-commerce unit Tokopedia, the companies said in a statement Monday, as per the media reports.
TikTok will reportedly get control over 75 per cent stake in this JV, which will run the shopping features of TikTok’s social media app in Indonesia.
The deal is signed to address regulatory compliances and let TikTok restart its online-shopping service in Southeast Asia’s largest retail arena. Indonesia in September announced sweeping regulations that forced TikTok to split payments from shopping in the country a separation that prompted TikTok to halt its online-retail service just as it was gaining traction against Sea Ltd. and GoTo.
TikTok Shop is the fastest-growing feature, the parent ByteDance is seeking new revenue sources beyond its popular social media service. It has targeted the online-shopping market of Indonesia, a country of USD 278 million, as a template for a global expansion from the US to Europe.
TikTok started the shopping feature in Indonesia in 2021 and its instant success encouraged it to expand into online retailing in other markets, including the US. This year, TikTok said it will invest billions of dollars in Indonesia and the broader Southeast Asian region.
Indonesia was among the first countries in Southeast Asia to push back against TikTok.
