TikTok has announced it will be investing over $1.5bn in Indonesia’s biggest e-commerce platform Tokopedia, in a deal that will allow it to reopen its online shopping business in the country.
The announcement comes after TikTok’s e-commerce platform was closed down in Indonesia after it failed to comply with new rules in South East Asia.
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As part of the new deal, the social media giant will combine its popular Indonesian TikTok shop with Tokopedia, the companies announced on Monday (11 December).
TikTok will receive a 75% stake in the business.
In a joint statement, the two companies said: “The strategic partnership will commence with a pilot period carried out in close consultation with and supervision by the relevant regulators.”
The social media giant began trading with its shopping feature in Indonesia in 2021. The rapid success of the venture led it to opening in other global markets.
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By GlobalDataDespite opening in the US, Indonesia has remained its most popular e-commerce location.
In Southeast Asia alone, the value of merchandise sold through TikTok Shop reached $4.4bn in 2022, according to research company GlobalData’s Thematic Intelligence: e-commerce report 2023.
The e-commerce market in Indonesia is continuing to grow at a rapid pace. The value of e-commerce sales in the country is expected to hit $44bn by next year, according to Indonesia’s central bank.
Despite TikTok’s push to get back into the Indonesian market, and the predicted rise in e-commerce sales, the value of e-commerce deals in the country has been a long way off from a peak in 2021, according to GlobalData’s deal database.
In 2021, the value of e-commerce deals in Indonesia reached $15.5bn, considerably more than the previous year which totalled $3.2bn.
In 2023 so far, the value of e-commerce deals has grown even smaller than 2020, with a total of 2.8bn.
According to GlobalData forecasts, the global e-commerce market grew from $2.5tn in 2016 to $5.9tn in 2022 at a compound annual growth rate of 15%.
By 2027, GlobalData expects the e-commerce market to be worth $9.3tn.
Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.
