TikTok will contribute $1.5 billion to GoTo's e-commerce venture in Indonesia

TikTok is set to acquire a controlling stake in the e-commerce unit of Indonesia's largest tech firm, PT GoTo Gojek Tokopedia, in a strategic partnership involving a long-term investment of $1.5 billion, as announced by the two companies on Monday.

The collaboration follows Indonesia's October decision to ban online shopping on social media platforms, aiming to safeguard smaller merchants and users' data. Consequently, TikTok had to shut down its e-commerce service, TikTok Shop.

As part of the agreement, TikTok will purchase 75.01% of PT Tokopedia, Indonesia's leading e-commerce platform under GoTo, for $840 million. Simultaneously, TikTok Shop's Indonesia business will be integrated into the expanded Tokopedia entity.

The joint statement from the two companies emphasized that the strategic partnership would kick off with a pilot period conducted in close consultation with relevant regulators and under their supervision.

Indonesia, with a population exceeding 270 million, boasts a large number of active social media users. TikTok, with 125 million users in the country, is strategically positioning itself through this partnership to navigate the evolving landscape of e-commerce in Indonesia