According to the BBC, The Chinese-owned company, Bytedance, intends to invest more than USD 1.5 billion in Indonesia's primary ecommerce platform, Tokopedia. TikTok Shop ceased operations in Indonesia in October 2023 to comply with new regulations in Southeast Asia.
With approximately 125 million users in Indonesia, TikTok plans to acquire just over 75% of Tokopedia and integrate its Indonesian business with TikTok Shop. The strategic partnership will undergo a pilot period in consultation with relevant regulators.
In addition to the joint venture, GoTo and TikTok will collaborate to promote Indonesian goods on their platforms and assist small and medium-sized businesses in developing production and sales strategies. This move follows the Indonesian government's ban on social media platforms engaging in online shopping to safeguard smaller merchants and user data.
According to the BBC, Indonesia, with a population exceeding 270 million, has a significant number of active social media users, constituting TikTok's largest online retail market before the October ban. The decision to ban online shopping on social media platforms was prompted by President Joko Widodo's cautious approach to ecommerce, emphasising the need for proper regulations.
Online retailing in Indonesia has experienced substantial growth, with the value of ecommerce sales projected to increase more than six-fold from 2018 to the next year, reaching IDR 689 trillion (USD 44 billion). TikTok Shop, established two years ago, has been gaining market share in Indonesia's online shopping sector, dominated by platforms such as Tokopedia, Shopee, and Lazada.
While the company is working to revive and consolidate its presence in countries such as Indonesia, TikTok has encountered scrutiny in the US, European Union, and the UK, where the app has been banned from certain networks due to security concerns.
In March 2023, CNN reported that the United Kingdom implemented a ban on the use of TikTok on official government devices. This move aligned with comparable restrictions previously enforced by Canada, the European Union, and the United States. The decision, as outlined in a government announcement, was based on concerns related to TikTok's affiliations with China through its parent company, ByteDance.
The primary apprehension centred around the potential for the Chinese government to exert pressure on these companies, compelling them to disclose users' personal information. CNN emphasised that TikTok was not extensively utilised by UK officials, rendering the measure a precautionary step in response to broader geopolitical considerations.
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