GoTo and TikTok on Track to be 100% Compliant of Indonesian Regulations

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Indonesian tech company GoTo, in partnership with Chinese-owned TikTok, is on track to achieve full compliance with the Southeast Asian nation's regulation prohibiting in-app transactions on social media within the next month and a half, according to GoTo's CEO. TikTok acquired a majority stake in GoTo's e-commerce unit Tokopedia in December, following a ban on transactions on TikTok Shop by the Indonesian trade ministry. The integration process is progressing well, with ongoing communication between all parties and related ministries nearing completion, as stated by CEO Patrick Walujo.

However, Indonesian Minister for Small and Medium Enterprises Teten Masduki noted last week that TikTok had not yet complied with the regulation. TikTok, owned by Chinese company ByteDance, did not immediately respond to requests for comment. Since the December deal, TikTok has resumed its e-commerce services, now facilitated by Tokopedia.

During an online briefing, GoTo's management announced they would receive a quarterly e-commerce fee from Tokopedia, contingent on Tokopedia's gross merchandise value (GMV). Based on a GMV of $2.9 billion recorded in the previous year's third quarter, GoTo anticipates an e-commerce service fee of $11.4 million.

Furthermore, GoTo expects its collaboration with TikTok to benefit not only its e-commerce division but also its financial services segment. The partnership will enable GoTo to offer digital payments and "buy now, pay later" credit schemes on the TikTok platform.