GOTO Group agreed to its tie-up with ByteDance’s TikTok to avoid further market-share losses in online shopping in Indonesia, chief executive officer Patrick Walujo said.

The Chinese social media company’s TikTok Shop more than doubled its market share to 11 per cent this year, Walujo said on a conference call with investors on Thursday (Dec 14). GoTo’s share of the pie shrank to 23 per cent from 28 per cent over that span, he added.

TikTok this week agreed to invest US$1.5 billion in a joint venture with GoTo that it will control, a pact aimed at addressing the Chinese company’s regulatory obstacles in its biggest online-retail market. GoTo becomes a passive backer of the venture, relinquishing control of its Tokopedia e-commerce arm.

“We were going to lose even more market share if we didn’t do anything,” Walujo explained. “Once we combine, we have a very high chance to become the No 1 player in a much bigger market.”

GoTo shares advanced as much as 9 per cent in Jakarta on Thursday. 

GoTo also said that it would receive a quarterly fee based on e-commerce services provided as part of the deal, which will directly contribute to its earnings. It’s now more likely that GoTo will achieve its target of positive adjusted earnings before interest, taxes, depreciation and amortisation this quarter, Walujo added. BLOOMBERG

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