By Reuters | Updated: February 28, 2024
JAKARTA, Feb 28 (Reuters) – Indonesian tech firm GoTo (GOTO.JK), opens new tab and Chinese-owned partner TikTok will be wholly compliant in a month and a half with the Southeast Asian nation’s regulation that bans in-app transactions on social media, GoTo’s CEO said on Wednesday.
Short video app TikTok acquired in December majority shares in GoTo’s e-commerce unit Tokopedia after the Indonesian trade ministry banned transactions on its TikTok Shop e-commerce unit.
“Integration process is going well. All parties continue to communicate with the related ministries and as far as we know the process is nearing completion,” CEO Patrick Walujo said in an online briefing.
Indonesian minister for small and medium enterprises Teten Masduki said last week TikTok had yet to comply with the regulation.
TikTok, owned by Chinese company ByteDance, did not immediately respond to a request for comment. Following December’s deal, TikTok has reopened its e-commerce services, which are now facilitated by Tokopedia.
GoTo’s management said in the briefing that it will receive a quarterly e-commerce fee from Tokopedia, with the sum being dependent on Tokopedia’s gross merchandise value.
Based on a GMV of $2.9 billion recorded in the third quarter of last year, the e-commerce service fee for GoTo will be $11.4 million, GoTo said.
GoTo also expects its partnership with TikTok will benefit not only its e-commerce business but also its financial services segment as it will be able to offer digital payments and “buy now, pay later” credit schemes on TikTok.
© Thomson Reuters 2024
