1. Startups

TikTok Shop Starts E-commerce Business Integration with Tokopedia

TikTok Shop is starting to be reactivated, with a Tokopedia-style green product catalog

TikTok and Tokopedia announced the first collaboration in the Buy Local campaign to coincide with National Shopping Day (Harbolnas) 2023, after announcing strategic partnership yesterday (11/12).

As of today (12/12), the appearance of the TikTok Shop is different. Explore further by DailySocial.id, in the Shop menu on the TikTok main page, now has a Tokopedia-style green color containing a catalog of products that consumers can buy. Seller accounts can be further explored in their catalogues, it feels like shopping on the platform E-commerce in general.

Before TikTok Shop was banned, the Shop menu was filled with products that had been personalized according to users' interests, both those that were often searched for on search engines and frequently purchased. There are also sellers who are currently in business live stream at the time.

Meanwhile, the "yellow basket" in the TikTok main menu has also returned to functioning for transactions. The experience offered is not much different from before TikTok was banned. Users can immediately select the product catalog when the seller is live streaming and complete transactions in it.

On the sidelines of the Buy Local campaign press conference, CEO of PT GoTo Gojek Tokopedia (GOTO) Patrick Walujo said that the main aim of this collaboration is to stimulate business E-commerce Tokopedia. However, this transition takes time and what is happening now is a trial period. “E-commerce "[TikTok Shop] becomes Tokopedia and transactions will occur on Tokopedia," he said.

He continued, "If the Tokopedia and TikTok businesses get bigger, we [GoTo] will also have a lot of advantages because there is Gopay, GoTo Financial will also get bigger. If there are more order, it can also be delivered with Gojek. "

This trial period is planned to last for three to four months, which will be carried out with consultation and supervision from the relevant ministries and institutions. The program that will be launched during this trial period is the Buy Local campaign starting on December 12 2023 to coincide with Harbolnas.

Patrick became chairman of the committee to facilitate the transition and integration, with support from representatives of PT Tokopedia and TikTok.

Tokopedia President Melissa Siska Juminto said, during this trial period, the party focused on supporting local MSMEs by creating a number of joint programs from upstream to downstream, namely:

  1. Development of MSME Producers, which are engaged in traditional cloth, coffee and dried fruit businesses,
  2. Integrated Program: Production improvement training (technology support, modernization, store operations); Digital promotion support (promotion via livestream, short videos, special campaigns on online platforms); Creator support (local product affiliate program),
  3. Development of technological human resources for talents, IT curriculum on various campuses,
  4. Promotion of local products in international markets, operating in the clothing, packaged food, accessories and agate industries.
“This is a long road and this is only the trial stage so we will work closely with the Ministry of Trade to get it done compliance, audits, and so on," he said.

In her remarks, Executive Director of E-Commerce TikTok Indonesia Stephanie Susilo said that over the last two years, TikTok in Indonesia has continued to provide a shopping experience that continues to grow. As many as 6 million local businesses and nearly 7 million creators have used the platform to make a living.

“As many as 90 thousand sellers and creators have been involved in various seminars held by TikTok to help them develop their businesses. In Indonesia, MSMEs play a big role in the economy. "We use our innovative capabilities to help MSMEs in Indonesia," he said.

He continued, "In fact, Harbolnas is a government initiative to grow the digital economy. The spirit of Harbolnas means a lot to us and marks a forgotten historical milestone. [..] Not only discounts, the community can take advantage of the TikTok content ecosystem to provide greater attention."

This occasion was also attended by the Minister of Trade Zulkifli Hasan. He said that the pillars of the economy in Indonesia are MSMEs. If Indonesia wants to become a developed country in 2045, the key word is MSMEs that move up in class. “That's why we pay attention and take sides political will "To protect this area we have to really do it," he said.

“This technological development inevitably requires us to try with new systems. MSMEs offline Like it or not, we have to live up to development. The government's role is to regulate and organize so that the technological developments used can be a solution win-win," he added

Become the controlling shareholder

As is known, Tokopedia and TikTok Shop Indonesia will merge and operate under the auspices of PT Tokopedia. This transaction is targeted to be completed in the first quarter of 2024. There are several important points revealed in the IDX information disclosure, namely:

  1. Tokopedia purchased assets in the form of business contracts and exclusive rights to own and operate the TikTok Shop in Indonesia from TikTok with a purchase value of $340 million.
  2. Share takeover agreement in connection with TikTok's investment plan in Tokopedia amounting to $840 million. These funds will be used to take part and pay in full for the new shares issued by Tokopedia.
  3. As part of the investment plan, Tokopedia will also receive a Promissory Note from TikTok amounting to $1 billion. This debt letter can later be used for Tokopedia's working capital needs in the future.

More Coverage:

"If this Investment Plan can be completed by the parties, this will result in TikTok becoming the owner of 75,01% of the total issued and fully paid capital in Tokopedia and the Company's ownership becoming 24,99% in Tokopedia," wrote GoTo Group management.

"However, the parties have agreed that the Company's ownership in Tokopedia will not be further diluted due to future funding from TikTok."

Promissory note known as a promissory note in which there are two parties, namely, the issuer and the investor. The contents of this letter usually consist of a statement of willingness without any conditions to pay money to the party listed in the letter.

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