- Tokopedia’s declining market share, especially among price-sensitive consumers.
- Tokopedia requires substantial investment to grow and survive against large.
- The deal gives TikTok Shop Indonesian access.
Market share challenges
According to GoTo Group chief Patrick Walujo, Tokopedia’s diminishing market share, especially among price-sensitive consumers, led to its acquisition by TikTok last month.
Walujo said Tokopedia cut incentives to achieve profitability, causing its share to drop amid “very intense” competition in Indonesian e-commerce.
.jpeg)
Surviving against the big boys
Walujo stated that Tokopedia requires substantial investment to grow and survive against large, well-funded foreign rivals.
Per data revealed, Tokopedia has 18 million monthly active users, far below its previously claimed 100 million.
.jpeg)
What TikTok Shop brings to the table
Meanwhile, TikTok Shop has 125 million MAUs in Indonesia and over twice Tokopedia’s estimated 2023 GMV of $6.6 billion.
Before acquisition, assessors valued Tokopedia at $606 million. TikTok obtained 75% for $1.8 billion in a promissory note and shares.
The deal provides TikTok Shop Indonesian access while giving GoTo ongoing revenue via an ecommerce fee from Tokopedia.
Integration is expected completed by April, with TikTok Shop handling promotions and Tokopedia managing transactions.
Indonesia’s trade ministry will audit in four months and decide if violations remain, after the cooperatives ministry said issues persist.
GoTo reported positive Q4 2023 adjusted EBITDA.
To read the original article in its entirety: https://www.techinasia.com/drop-tokopedias-market-share-led-tiktok-deal-goto-chief
