GoTo closes merger with TikTok Shop Indonesia | e27

Indonesian digital ecosystem giant GoTo Group has announced the completion of its merger with TikTok Indonesia, the e-commerce arm of the global entertainment platform TikTok.

Tokopedia and TikTok Shop Indonesia’s businesses are now officially combined under Tokopedia, jointly owned by GoTo and TikTok as strategic partners in Indonesia, with TikTok holding a controlling stake.

As part of the deal, TikTok will invest over US$1.5 billion in the enlarged entity over time to provide future funding the business requires without additional dilution to GoTo. The group benefits from the growth of the enlarged entity. It remains an ecosystem partner to Tokopedia through its digital financial services via GoTo Financial and on-demand services via Gojek.

Also Read: The evolution and regulation of social commerce in Indonesia: The TikTok Shop ban

In addition, GoTo Group claims to have achieved positive adjusted EBITDA for the fourth quarter while exceeding the top end of its full-year adjusted EBITDA guidance range.

GoTo Group CEO Patrick Walujo said: “Having reached positive adjusted EBITDA for the fourth quarter of 2023, we can now look forward to accelerating our progress, driven in part by supportive ecosystem partners. As our profitability and cash flow continue to improve, we will optimize our capital usage in line with a newly developed capital allocation plan, which may include a share buyback initiative, subject to regulatory and shareholder approval.”

GoTo also receives an ongoing revenue stream in the form of an e-commerce service fee from Tokopedia commensurate with its scale and growth.

TikTok and Tokopedia have initiated an MSME empowerment programme through the #MelokalDenganBatik campaign, involving hundreds of local batik entrepreneurs in Solo and Yogyakarta. This initiative aims to support small businesses by providing them with production support technology, including advanced production tools, insights on trends and inventory management.

These initiatives are part of a broader strategy to transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years, particularly in the MSME sector.

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