
In a bid to rekindle its online shopping business in the country, the leading China-based, short video platform TikTok has jointly signed a deal with an Indonesian tech giant GoTo.
Having around 125 million users in Indonesia, TikTok is going to invest over $1.5bn in Indonesia's biggest e-commerce platform Tokopedia.
The decision comes after TikTok Shop’s closure in Indonesia in October this year, which was an outcome of its decision to align with new rules in South East Asia's largest economy.
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As per the deal, TikTok will incorporate TikTok Shop's Indonesia business with Tokopedia by acquiring over 75% of it.
"The strategic partnership will commence with a pilot period carried out in close consultation with and supervision by the relevant regulators," the two companies said in a joint statement.
The partnering firms also said they will endorse Indonesian goods on their platforms to help the country's small and medium-sized businesses develop their production and sales strategies.
The deal comes on the heels of the dismissal of online shopping on social media platforms in Indonesia after the government decided to protect small-scale businesses and users' privacy.
Being over 270 million, most of Indonesia's population is active on social media, forming TikTok's biggest online retail market before the ban was imposed.
Announcing the ban in September, Indonesia's President Joko Widodo said, "We need to be careful with e-commerce. It can be very good if there are regulations but can turn bad if there aren't any regulations."
According to the country's central bank, the value of e-commerce sales will have increased more than six-fold between 2018 and next year, reaching 689 trillion Indonesian rupiah ($44bn/£35bn).