TikTok Shop Partners with Tokopedia to Resume Operations in Indonesia

TikTok Shop, an e-commerce platform closely associated with the TikTok social media, has officially resumed operations in Indonesia after being temporarily closed in October 2023.

Now, TikTok Shop has partnered with Tokopedia, reinforcing its dominance in the Indonesian e-commerce realm. The shopping feature within the TikTok app in Indonesia will be fully operated and managed by PT Tokopedia.

TikTok has secured the majority of PT Tokopedia's shares, which are a crucial element of the GoTo Gojek Tokopedia Tbk e-commerce entity. In the acquisition process, TikTok acquired 75.01% of Tokopedia's shares, while the GOTO Group retained 24.99% of the shares.

This strategic alliance brings together Tokopedia and TikTok Shop Indonesia under the umbrella of PT Tokopedia. Additionally, TikTok will have control over PT Tokopedia. The management of the TikTok shopping application in Indonesia will be entirely handed over to PT Tokopedia.

TikTok has committed to injecting over US$1.5 billion as long-term support for Tokopedia's operations. GOTO explicitly stated that this move would not reduce their ownership in Tokopedia.

GOTO's management officially announced their commitment on Monday (11/12), affirming that this investment would strengthen Tokopedia's operations without diminishing GOTO's ownership in the company.

Impact on Stock Prices

On Monday (11/12/2023), the stock price of PT GoTo Gojek Tokopedia Tbk (GOTO) plummeted by 12.9% to Rp 94 per share at the end of the first trading session on the Indonesia Stock Exchange (BEI).

This decline was a direct response to the announcement of the cooperation between the GoTo Group, Tokopedia, and TikTok worth Rp 23 trillion. However, this might not necessarily reflect the long-term sentiment of investors.

Hans Kwee, a capital market observer, explained that the drop in GOTO's stock price was triggered by profit-taking actions from investors.

When the merger plans involving the GOTO, Tokopedia, and TikTok started surfacing, their stock prices surged. Nevertheless, after the official announcement, investors began selling their shares to capitalize on the earlier price increase.