Friday, February 23, 2024

TikTok plans to re-enter Indonesian market through joint venture with Tokopedia and others

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TikTok is planning joint venture collaboration with a number of companies in Indonesia including Tokopedia, Blibli, Bukalapak, and CT Corp in an effort to re-enter Indonesia.

Previously, TikTok via TikTok Shop was finally closed due to business permit issues that have been in effect in Indonesia since October 4, 2023. The Ministry of Trade (Kemendag) officially deleted the TikTok Shop application, because it was related to Minister of Trade Regulation No. 31 of 2023 which prohibits social media platforms from acting as e-commerce.

Teten Masduki, Minister of Cooperatives and SMEs, said that TikTok is trying to re-enter the Indonesian market by collaborating with a number of e-commerce companies.

Bloomberg said, TikTok is trying to hold investment talks with Tokopedia, and is considering investing in the form of a joint venture.

“This investment is one of several options being considered by the Chinese company to try and restart its online store business in its largest e-commerce market,” wrote Bloomberg, on November 22, 2023.

The results of potential investment discussions at Tokopedia could take as much as the next few weeks.

According to Momentum Works research results, the percentage of TikTok Shop GMV transactions in Southeast Asia is predicted to reach 13.9%, below Shopee which reaches 45.9%, and above Tokopedia 14.2%, and Lazada 17.5%.

From this research, Indonesia accounts for a third of TikTok Shop transactions, around 3 million orders per day before closing. Therefore, Momentum Works is confident that TikTok Shop will not leave Indonesia.

Meanwhile, reports from Google, Temasek, and Bain & Company predict that Southeast Asia’s e-commerce GMV will increase 6% year-on-year (yoy) from US$ 130 billion to US$ 139 billion.

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