Tokopedia and TikTok Shop ID finalise strategic partnership

Indonesian digital company, GoTo Group (GoTo) has completed its strategic partnership with short-form video-sharing platform, TikTok which aims to drive long-term growth for Indonesia's MSMEs and digital economy.

As part of the partnership, Tokopedia and TikTok Shop Indonesia's businesses are now officially combined under the Tokopedia entity which is now jointly owned by GoTo and TikTok as strategic partners in Indonesia.

Under the combined Tokopedia entity, TikTok holds a controlling stake, according to GoTo in a statement.

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The integration and migration of the two apps is set to be completed within the trial period which will be in consultation with the relevant ministries and in line with prevailing regulations.

"We are proud to officially work with Tokopedia, its stakeholders and employees,” said executive director, eCommerce, TikTok Indonesia, Stephanie Susilo.

“We view this moment as a significant milestone in our commitment to contribute to Indonesia, its MSMEs and the growth of its digital economy alongside GoTo as a partner,’ she also said.

TikTok and Tokopedia have initiated an MSME empowerment program through the #MelokalDenganBatik campaign which involves hundreds of local batik entrepreneurs in Solo and Yogyakarta.

This initiative aims to support small businesses by providing them with production support technology, including advanced production tools, insights on trends and inventory management.

“Having reached positive adjusted EBITDA for the fourth quarter of 2023, we can now look forward to accelerating our progress, driven in part by supportive ecosystem partners,” said GoTo Group CEO, Patrick Waluj.

“As our profitability and cash flow continue to improve, we will optimize our capital usage in line with a newly developed capital allocation plan, which may include a share buyback initiative, subject to regulatory and shareholder approval,” he explained.

Additionally, TikTok has committed to invest over US$1.5 billion in the enlarged entity over time, aiming to provide future funding required by the business without additional dilution to GoTo. This arrangement seeks to allow both companies to serve Indonesian consumers and MSMEs more comprehensively.

The strategic partnership commenced with a pilot period carried out in close consultation with and supervision by the relevant regulators. The first campaign, called the “Beli Lokal” initiative, launched on 12 December 2023 to coincide with Indonesia’s National Online Shopping Day (Harbolnas). The government programme was designed to grow Indonesia’s digital economy by supporting local MSMEs. The campaign, which will be available on both TikTok and Tokopedia’s platforms, will promote a broad range of merchants, focusing particularly on Indonesian products.

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