TikTok Shop is relaunching its Indonesian business by merging with GoTo-owned e-commerce company Tokopedia.

GoTo is an Indonesian technology giant that was created in 2021 as part of a merger between Tokopedia and ride-hailing company Gojek.

The move comes after TikTok Shop withdrew from Indonesia in October following the country's decision to ban sales on social media in a bid to protect local businesses.

The two businesses will be combined under the existing Tokopedia company, in which TikTok will take a controlling stake.

The shopping features within the social media giant’s app in Indonesia will be operated and maintained by the enlarged entity.

TikTok has said it will invest more than US $1.5 billion in the new company.

The merger will promote a broad range of merchants, with a strong focus on Indonesian products, said the partnership.

“The strategic partnership will commence with a pilot period carried out in close consultation with and supervision by the relevant regulators,” added the companies in a statement.

They say that TikTok, Tokopedia, and GoTo will "transform" Indonesia's e-commerce market and create millions of new job opportunities over the next five years.

As more than 90 per cent of the combined business' merchants are micro, small and medium enterprises (MSMEs), the companies said that they will support them through a number of new initiatives.

These include the promotion of Indonesian products on Tokopedia and TikTok’s platforms, building the capacity of Indonesia's MSMEs through a holistic programme focusing on skills development and providing resources relating to upstream production and selling, and helping merchants with marketing, branding, and sustainable business practices.

They also have plans to establish technology centres across Indonesia to develop local tech talent.

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