GoTo Group, the Indonesian digital ecosystem giant, has finalized its merger with TikTok Indonesia, the e-commerce branch of the global entertainment platform TikTok.
The businesses of Tokopedia and TikTok Shop Indonesia have officially merged under Tokopedia, which is now jointly owned by GoTo and TikTok as strategic partners in Indonesia, with TikTok holding a controlling stake.
As part of the agreement, TikTok will invest more than US$1.5 billion in the combined entity over time to provide necessary funding without further dilution to GoTo. The enlarged entity will benefit from the growth, while GoTo 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
Additionally, GoTo Group has reported positive adjusted EBITDA for the fourth quarter, exceeding its full-year adjusted EBITDA guidance.
CEO Patrick Walujo stated, “Having achieved 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.”
Furthermore, GoTo will receive an ongoing revenue stream in the form of an e-commerce service fee from Tokopedia based on its scale and growth.
TikTok and Tokopedia have launched an MSME empowerment programme through the #MelokalDenganBatik campaign, which involves numerous local batik entrepreneurs in Solo and Yogyakarta. The initiative aims to support small businesses by providing them with production support technology and insights on trends and inventory management.
These efforts are part of a broader strategy to transform Indonesia’s e-commerce sector and create millions of new job opportunities, particularly in the MSME sector, over the next five years.
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