Whispers are circulating that TikTok Shop might be teaming up with Tokopedia as their e-commerce partner, aiming to relaunch their operations in Indonesia. Rumours about this collaboration began surfacing last week, generating anticipation among many, since TikTok Shop officially ceased operations on 13 October 2023.
According to Patric Walujo, GoTo’s Main Director, Tokopedia is in a pilot project with Meta and Instagram. This initiative involves live streaming on both Tokopedia and Instagram Live applications. This collaboration is anticipated to herald a significant advancement in Indonesia’s digital economy.
Nevertheless, reports suggest that ByteDance, the parent company of TikTok Shop, is poised to inject substantial investment funds into Tokopedia, signalling a potential forthcoming collaboration.
Meanwhile, representatives from TikTok Indonesia and Tokopedia remain hesitant to discuss this significant project with the public. According to Bloomberg (27/11/2023), it’s anticipated that Tokopedia and TikTok Shop will establish a joint venture, which is expected to be finalized in the upcoming weeks.
Bloomberg also reported ByteDance’s diligent efforts to revive their e-commerce services, which had amassed a substantial $15 billion between January and October 2023. Since its launch in 2021, TikTok Shop has consistently generated substantial profits annually. Moreover, TikTok has implemented various strategies, including affiliates and highly engaging content, to bolster its success.
In 2022, TikTok Shop surged to the 5th position among Southeast Asia’s e-commerce platforms, surpassing other regional giants like Shopee, Lazada, Tokopedia, and Bukalapak, marking its ascent as one of the region’s top e-commerce platforms by Gross Merchandise Value (GMV).
The Impact of TikTok Shop Closure on Indonesian MSMEs
The shutdown of TTS in October 2023 significantly impacted Indonesia’s national economic landscape. Data from Compas.co.id indicates a loss of over $84 million in total transactions following the closure of TTS operations. Among these, the beauty sector suffered the most substantial hit, totalling $46.7 million, while F&B experienced a loss of $17.6 million.
Numerous MSMEs emerged due to TikTok Shop’s existence but had to shut down following its closure. This led to widespread layoffs across multiple companies and affected courier services due to reduced deliveries in recent months.
Conversely, the absence of TTS during this period allowed other e-commerce firms to capitalize and generate profits. Shopee emerged as one of the e-commerce companies that capitalized on TTS’s closure. In mid-November 2023, Shopee observed a transaction surge, reaching hundreds of trillions. As per Katadata, Shopee achieved a Gross Transaction Value (GMV) of $20.1 billion or approximately IDR 311 trillion between July and September in the third quarter. Forecasts predict further growth as we progress through October to December 2023.
