TikTok and GoTo Partnership
In a strategic move, TikTok and GoTo partnership over the next few months. This initiative comes in the wake of Indonesia’s regulatory scrutiny, which aims to evaluate the impact on small-scale merchants in the Southeast Asian nation.
TikTok’s recent announcement of a $840 million investment to acquire the majority of GoTo’s e-commerce unit, Tokopedia, follows Indonesia’s September ban on online shopping via social media platforms. The ban, implemented to safeguard small businesses and user data, prompted TikTok and GoTo to forge this TikTok and GoTo e-commerce partnership, signaling a significant development in the regional e-commerce landscape.
Collaborative Pilot Period Under Regulatory Supervision
Commencing on Tuesday, the collaboration will undergo a pilot period closely coordinated with and supervised by relevant regulators. Indonesia’s Trade Minister, Zulkifli Hasan, emphasized a trial duration of three to four months to navigate the intricacies of technology, acknowledging the need for refinement. The primary goal of this trial period is to aid sellers affected by the suspension of TikTok Shop, offering them an opportunity to revive their businesses.
Zulkifli assured that the Ministry would conduct a thorough audit and assessment of the TikTok and GoTo e-commerce partnership after the trial period. He reiterated that the regulatory measures are designed to protect the interests of small businesses, which contribute significantly to the nation’s workforce, employing 90% of it.
For TikTok, this collaboration is a strategic move to leverage its substantial user base of 125 million in Indonesia into a lucrative source of e-commerce revenue. With the country’s e-commerce gross merchandise value anticipated to surpass $160 billion by 2030, TikTok aims to position itself as a formidable competitor to established players like Shopee (owned by Sea) and Lazada (owned by Alibaba).
Analysts, including those from Jefferies, foresee positive outcomes from the pilot program. They anticipate a seamless user experience similar to TikTok Shop’s pre-ban era, citing its rapid growth in Indonesia. TikTok Shop, with a total online transaction value reaching $6 billion before the ban, achieved a milestone that took Tokopedia a decade to reach. This collaboration is poised to strengthen TikTok’s position in the Indonesian e-commerce landscape, setting the stage for heightened competition with established industry players.
Read More (Innovation)
