- ByteDance acquired a 75% stake in Tokopedia for US$1.8 billion.
- Tokopedia struggled to compete with budget-friendly platforms.
- Tokopedia’s lofty ambitions and lack of focus led to missed opportunities.
ByteDance acquired a 75% stake in Tokopedia, one of Indonesia’s most prominent homegrown tech companies, for a mere US$1.8 billion in late 2023.
The deal, widely described as a “merger” with TikTok Shop, obscured the fact that Tokopedia’s valuation had diminished compared to its heyday, when it raised US$1.1 billion from SoftBank and Alibaba in 2018.
Tokopedia vs. the bargain hunters
Tokopedia’s struggle to maintain its market share, especially among price-conscious consumers, was a key factor leading to the TikTok Shop deal.
The company recognized the need to expand beyond major urban areas and strengthen its “hyperlocal” shopping experience.
However, competing with budget-friendly platforms like Shopee and TikTok Shop proved challenging without a cash cow to sustain heavy discounts and incentives.
Shooting for the stars, but landing on the moon
Tokopedia’s ambitions may have been too lofty, leading to a lack of focus. The company wound down parts of its warung digitalization service, Mitra Tokopedia, which could have been crucial for its lower-tier city strategy.
Meanwhile, niche player Blibli went public and focused on the premium segment, becoming the first ecommerce platform to become an authorized reseller of Apple products in Indonesia, offering an alternative view of what Tokopedia could have been.
To read the original article: https://www.techinasia.com/tokopedia-waste-potential
