The firms announced that Chinese-owned TikTok would invest $1.5 billion and acquire a majority share in the e-commerce division of Indonesian superapp GoTo, Tokopedia.

This will give the hugely popular short video app a much-needed boost after a local ban on social media sales of online shopping hurt it.

Following the adoption of new legislation by the Indonesian government in September that forbade e-commerce on social media platforms in the nation, talks broke out between GoTo and TikTok, which is controlled by China's ByteDance. Although the government claims that the action is intended to safeguard physical retailers and marketplaces in the biggest economy in Southeast Asia, TikTok was perceived as suffering a significant setback as a result.

One of TikTok's most important markets is Indonesia. As of October, 106.5 million people in the nation used TikTok, making it the second-largest user base behind the United States, according to research firm Statista. Meanwhile, TikTok was putting increasing pressure on Tokopedia as it increased its market share in Indonesia.

In a joint statement, GoTo and TikTok announced that Tokopedia and TikTok Shop, the company's Indonesian business, will merge under the current Tokopedia name.

The expanded organization will run and maintain the shopping aspects of the TikTok app in Indonesia. As per the agreement, TikTok will hold 75.01% of the merged companies. The entity will continue to be a member of the GoTo Group, and GoTo will hold the remainder.

Closing in the first quarter of 2024, the deal is expected to start with a pilot period carried out in close consultation with and supervision by the relevant regulators, according to the statement.