It sounds so trivial: a consumer scrolls on a social media app and taps to buy a product featured in a video. But this is becoming a very big business. The trend is so disruptive that the Indonesian government has banned online shopping on social media platforms to protect smaller merchants. TikTok may have found a way around that prohibition.
The Chinese-owned short video app will spend $1.5bn to become the controlling shareholder of GoTo’s Tokopedia. TikTok will buy 75 per cent of the unit, Indonesia’s biggest ecommerce platform, for $840mn. It will invest the rest of the money in the future of the business.
TikTok Shop, an in-app ecommerce platform, has been growing swiftly. Users quickly get hooked on buying items directly in the app. This pushed TikTok Shop’s estimated Southeast Asian gross merchandise value to $4.4bn last year. Its growth rate has outpaced regional rivals for two years.
