GOTO - Byte Dance reported to strike a deal with GOTO

GOTO - Byte Dance reported to strike a deal with GOTO A parent company of Tiktok, Byte Dance is reportedly to have struck a deal with Goto Gojek Tokopedia (GOTO) in a move to revive TikTok Shop operations in Indonesia. The deal is necessary to follow government's regulation that pushed the company to team up with local company to maintain its presence in domestic market. (Source: Bloomberg, CNBC Indonesia) Comment: While details on the matter remain undisclosed, we believe that the news will be broadly positive for Indonesia's e-commerce and GOTO in particular. With TikTop teaming up with GOTO, it may reduce the intensity of e-commerce competition that has been "cut-throat" for past years, which led to Tokopedia’s market share shrinking. Meanwhile, Tokopedia could enjoy significant benefits from synergy and may receive windfall from potential GMV from previous TikTok Shop as well as broader exposure from the social media giant in an exchange of market access. TikTok is previously reported to be planning to form a JV with Tokopedia as TikTok Shop emergence was contemptuous issue especially for SMEs. Government also raised concern over TikTok Shop’s Project S that was seeking to expand it from trading platform to manufacturing and distribution, as well as taxation issue which prompted to regulation banning social media from running e-commerce