Global entertainment platform TikTok has entered a strategic partnership with GoTo Group to restart the online shopping business in Indonesia.

TikTok, which launched the e-commerce experience TikTok Shop in Indonesia in 2021, closed the service in September 2023 after the Indonesian government banned online shopping on social media platforms.

TikTok will combine its Indonesian business with Tokopedia, the e-commerce platform of GoTo, under the existing PT Tokopedia entity.

The social media platform will own a greater than 75% stake in the merged entity, which will operate and maintain shopping features within the TikTok app in Indonesia.

TikTok, which is owned by China’s ByteDance, will invest more than $1.5bn to support the long-term growth of the entity.

The partnership will enable TikTok and GoTo to serve Indonesian consumers and micro, small and medium enterprises.

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By GlobalData

It will begin with a pilot period carried out by consultants under the supervision of relevant regulators, the companies confirmed in a joint statement.

For GoTo, the partnership aligns with its strategy to strengthen its financial and strategic position by increasing its addressable market.

TikTok, Tokopedia and GoTo have pledged to transform the e-commerce sector in Indonesia up to 2028, creating millions of new job opportunities.

The transaction is expected to close in the first quarter of 2024.

GoTo CEO Patrick Walujo quoted by Reuters as saying: “We are creating an Indonesian e-commerce champion, combining Tokopedia’s strong local presence with TikTok’s mass market reach and technological prowess.

“GoTo now sits on a much stronger foundation and we expect this partnership to bring many benefits not just for e-commerce, but for our on-demand services and fintech businesses as well.”