TikTok to Invest More Than $1.5 Billion in GoTo to Restart Indonesia E-Commerce Business — Update
By Ben Otto
Bytedance's TikTok will invest more than $1.5 billion in a deal with GoTo Group that will allow the Chinese video-sharing app to resume retail operations in Indonesia, one of its most successful e-commerce markets.
The companies said Monday that TikTok Shop Indonesia and GoTo's Tokopedia e-commerce platform will be combined under the existing Tokopedia entity, with TikTok taking a 75% controlling stake.
Tokopedia will buy assets and rights of TikTok's Indonesian shopping business for $340 million, while TikTok will pay $840 million to subscribe to new shares for its stake in Tokopedia, according to regulatory filings by GoTo. The filings showed that Tokopedia, Indonesia's largest online shopping platform, will also receive a promissory note from TikTok for $1 billion for future working-capital needs.
The deal is expected to close in the first quarter of 2024.
Shares of GoTo Gojek Tokopedia were 21% lower in afternoon trading, taking them into negative territory for the year.
The agreement comes as TikTok, owned by Beijing-based Bytedance and known mainly for its viral short-form videos, has been seeking to leverage its rising global popularity and China's position as the world's factory floor to compete in the online retail space known as social commerce.
Indonesia had been one of TikTok's more successful e-commerce markets after launching in 2021, but the company was forced to shut retail offerings in October after Jakarta authorities banned online shopping on social-media platforms, a move intended to protect small merchants from e-commerce competition.
The tie-up with GoTo returns TikTok's shopping services to the world's fourth-most populous nation and the largest economy in a region where the app has made significant inroads. Across Southeast Asia, TikTok said it has a monthly user base of 325 million and 15 million businesses.
The return also comes as TikTok makes progress on another major front: the U.S. In September, the company expanded its e-commerce service to all of its 150 million users in the U.S., the app's largest market, after months of testing, delays and uncertainty amid strained U.S.-China relations.
Globally, TikTok aims to increase the total amount of goods sold on its platform, or gross merchandise value, to $20 billion this year from less than $5 billion in 2022, The Wall Street Journal has reported.
Write to Ben Otto at ben.otto@wsj.com
(END) Dow Jones Newswires
December 11, 2023 04:27 ET (09:27 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
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