TikTok has now announced that it will invest as much as $1.5 billion in a joint venture company with GoTo Group in Indonesia, allowing them to refocus on the e-commerce arena in the largest country in Southeast Asia.
Under this collaboration, this new joint venture company will combine the business of TikTok Shop and Tokopedia in Indonesia. TikTok will receive a 75% stake in this new company.
This move is expected to solve TikTok's challenge to get approval to run an e-commerce business in the country. Previously, TikTok Shop had been banned from operating in Indonesia – at the same time providing a major operational impact for the social media company in terms of generating revenue.
At the same time, Indonesia may be a pilot country to see how TikTok Shop enters and operates in a certain market - and perhaps the same thing is implemented in other countries around the world.
For GoTo itself, this move will give them a large global partner, while also expected to increase the rate of purchases and payments for e-commerce. This is also expected to help GoTo reach profitability levels faster.
With this latest development, let's all look forward to what's next for Tokopedia, and how other countries will also respond to the implementation method of TikTok Shop in their respective countries.