ByteDance Reportedly Will Invest in Tokopedia, Signaling the Return of the TikTok Shop
The investment agreement will occur as soon as next week, but still has to wait for approval from a number of parties
ByteDance, the parent of TikTok, has reportedly reached an agreement to invest in one of the GoTo Group units in Indonesia and work together to provide services e-commerce.
Menurut source Bloomberg, ByteDance has agreed to cooperate with Tokopedia rather than compete directly with local platforms. This investment agreement is said to occur as soon as next week.
Although the two companies have reached an informal agreement, final details of the alliance are being finalized and could change before they are announced. Also, it still has to wait for regulatory approval and could still possibly fail.
If this investment really happens, it will be the first investment for TikTok Shop, which is growing rapidly and making breakthroughs in shopping online in various regions. However, this progress in Indonesia had to be halted when complaints emerged from local traders - which ultimately forced them TikTok Shop to close.
If the agreement with GoTo goes smoothly, this could become a new model for TikTok in expanding in other markets, such as Malaysia. The Malaysian government has begun to signal its willingness to review the influence of external players, such as TikTok Shop.
Previously, news broke that TikTok and GoTo were discussing potential investment but another option was a joint venture. This may require building a new e-commerce platform. Representatives for TikTok and GoTo declined to comment.
The main goal of ByteDance going down the mountain is to revive shopping services online The largest retailer in Southeast Asia. Indonesia is the first and largest market for TikTok Shop. The service started in 2021 and its instant success among young, video-loving buyers prompted it to expand into other markets, including the United States.
However, in this country, TikTok is the only platform directly affected by the new regulations issued by the Minister of Trade Zulkifli Hasan in October 2023. TikTok announced the service E-commerce they close effectively on October 4, 2023 at 17:00 WIB.
For GoTo, a deal with TikTok could be risky because it would help retail competitors online size to operate in Indonesia. However, the deal will also give GoTo a strong global social media partner in an agreement that could increase shopping, logistics and payments volumes for both companies.
GoTo CEO Patrick Walujo is working to bring GoTo to profitability by the end of this year to show that the company has long-term potential. One strategy is to continue the previous director's initiative to reduce losses by cutting jobs, cutting promotions and tightening spending controls.
Before agreeing with GoTo, TikTok had attempted to involve government officials and other social media companies to find a way to restart operations e-commerce. Minister of Cooperatives and SMEs Teten Masduki said TikTok had spoken to five companies including Tokopedia, PT Bukalapak.com and Blibli about possible partnerships.