Chinese platform “TikTok” will invest $1.5 billion to become the majority shareholder of e-commerce unit “Tokopedia” as it seeks to restart its online marketplaces that have been suspended by regulators in Southeast Asia’s biggest economy.
Indonesia banned online shopping on social media platforms in October to protect the data of smaller merchants and users, forcing “TikTok” to shut down its e-commerce service “TikTok Shop”.
The country was among the few where the social network launched “TikTok Shop” earlier this year to tap into a large user base and compete with fast-growing online stores such as ‘Temu’ and ‘Shein’, which were helped by videos on “TikTok” that went “viral”.
Under the deal, “TikTok” will buy 75.01% of ‘Tokopedia’ owned by ‘GoTo’, the largest e-commerce platform in Indonesia, and introduce the business of “TikTok Shop” in Indonesia. in the expanded entity ‘Tokopedia’.
The strategic partnership will begin with a pilot period that will be carried out in close consultation and supervision by the relevant regulatory authorities, the two companies said in a statement on Monday.
“TikTok”, owned by China’s ‘ByteDance’, has 124 million users in Indonesia and is looking to tap into this large user base to have a significant source of e-commerce revenue.
The transaction will be completed by the first quarter of 2024, ‘CNN’ reports.
Indonesia’s e-commerce industry is set to expand to about $160 billion by 2030 from $62 billion this year, according to a report by Google, Singaporean public investment firm ‘Temasek Holdings’ and consultancy ‘Bain & Co’.
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