TikTok Is Planning To Invest Heavily To Enter The Indonesian Market

According to reports, on Wednesday (November 22), citing people familiar with the matter, the popular short video platform TikTok is in discussions with Indonesia’s GoTo Group about the possibility of investing in the latter’s online retail business unit Tokopedia.

The investment plan currently being discussed by both parties is expected to be agreed upon in the next few weeks. This move means that TikTok will inject capital into Tokopedia, the online shopping platform of the Indonesian GoTo Group, and the two parties may establish a joint venture to create a new e-commerce platform, which will mark the return of TikTok's e-commerce business to the Indonesian market. Start.

People familiar with the situation revealed that GoTo Group is a technology giant formed by the merger of Indonesia's largest local travel service provider Gojek and the largest shopping website Tokopedia in May 2021. However, its financial reports in the past two years show that its performance is not satisfactory. According to GoTo's financial report for the first half of this year, the company's net loss in the first six months was as high as 7.2 trillion rupees (approximately US$470 million), but this figure has significantly reduced compared with the same period last year as the company reduced incentive expenses. . The company's full-year net loss in 2022 was 40.4 trillion rupees, a year-on-year increase of 56%, while the net loss in the first quarter of 2023 shrank 40% year-on-year to 3.86 trillion rupees. In the April-June quarter, the company's net loss was 3.3 trillion rupees.

In order to revitalize its e-commerce business, TikTok Shop has recently been seeking new cooperation opportunities in Indonesia. There are reports that TikTok has held discussions with Indonesian government officials and other social platforms, including potential partners such as Tokopedia, PT Bukalapak.com and Blibli.

At present, this possible transaction presents both opportunities and challenges to GoTo Group. On the one hand, backing a major online retail competitor could have an impact on one's own business. But on the other hand, cooperation with TikTok can significantly increase the sales and payment business volume of both parties, and bring a powerful global social media ally to the GoTo Group.

As TikTok continues to navigate various challenges and regulatory issues in Indonesia, its negotiations with GoTo and other potential partners will have a key impact on the future direction of its e-commerce business. The results of these discussions may determine TikTok's expansion strategy in Southeast Asia and other markets around the world.

It is worth noting that although the details of the transaction have not been made public, any such transaction would need to receive formal approval from local regulators before being finalized.