(Yicai) Dec. 12 -- TikTok, the short video platform owned by China’s ByteDance, is making a swift return to Indonesia’s e-commerce market by investing USD1.5 billion in Tokopedia two months after the Southeast Asian country banned transactions on social media platforms.

TikTok has agreed to pay USD840 million for 75 percent of Tokopedia and will inject TikTok Shop’s local operations into the unit of Indonesian tech conglomerate GoTo Group, it said yesterday. TikTok will also invest funds to grow the merged business, it added.

TikTok's decision to return to Indonesia's e-commerce market through Tokopedia is a compromise made because of the country’s new regulations, market insiders noted. The local business of TikTok Shop, which halted operations in early October, reopened today.

To protect small and mid-sized merchants, Indonesia’s trade ministry issued new regulations on Sept. 27 prohibiting social media platforms from selling goods and facilitating transactions. It also set the minimum price of goods bought from abroad by local e-commerce sites at USD100. 

Founded in 2009, Tokopedia is Indonesia's largest online marketplace, and it merged with local ride-hailing titan Go-Jek in 2021 to form GoTo Group, which went public on the Jakarta Stock Exchange in April last year. Chinese e-commerce giant Alibaba Group Holding is one of GoTo's major shareholders, with an 8.8 percent stake, according to its listing prospectus.

TikTok Shop has served 80 million Indonesian users and millions of sellers in the past two years, while content creators also earn income via the platform, Kang Zeyu, head of TikTok e-commerce, said in October. The firm is negotiating with Indonesian authorities to find the best solution to provide services for local companies and users, Kang added. 

Other Chinese internet giants are also behind leading e-commerce platforms in SE Asia. Tencent Holdings is the biggest shareholder in Singapore's Sea, the owner of Shopee, which has the region's largest market share, while Alibaba owns a controlling stake in the second-biggest player, Singapore's Lazada Group.

Editors: Dou Shicong, Martin Kadiev