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TikTok buys majority stake in Indonesia’s Tokopedia

ByteDance-owned TikTok has invested USD 840 million to buy a majority stake in Indonesian tech conglomerate GoTo’s e-commerce unit, as the Chinese media giant looks boost its online shopping business in the Southeast Asian nation.

SEE ALSO: TikTok eyeing USD 20 billion in e-commerce sales in 2023, SEA to drive growth

Under the deal, TikTok will buy 75.01 percent of Tokopedia and place TikTok Shop’s Indonesia business into the Tokopedia entity. The new partnership will commence with a pilot period carried out in close consultation with and supervision by relevant regulators, the companies said in a joint statement.

“We are creating an Indonesian e-commerce champion, combining Tokopedia’s strong local presence with TikTok’s mass market reach and technological prowess,” said GoTo CEO, Patrick Walujo.

“GoTo now sits on a much stronger foundation and we expect this partnership to bring many benefits not just for e-commerce, but for our on-demand services and fintech businesses as well.”

The deal will be completed by the first quarter of 2024 and Tokopedia will receive a USD 1 billion promissory note from TikTok that can be used to fund working capital needs.

In addition to Tokopedia, GoTo’s other businesses include ride-hailing, delivery and financial services.

In June, TikTok announced plans to more than quadruple the size of its worldwide e-commerce operations to as much as USD 20 billion in merchandise sales in 2023,  with growth in Southeast Asia said to be the driving force, particularly in Indonesia.

According to a report by Google, Temasek Holdings and Bain & Co., Indonesia’s e-commerce industry is set to expand to be worth about USD 160 billion by 2030 from USD 62 billion this year.