TikTok, the Chinese-owned video service, is set to invest in a unit of Indonesia’s GoTo Group and collaborate on an online shopping service, breaking ground on an e-commerce template beyond Indonesia. The agreement is expected to involve TikTok’s investment in Tokopedia, a major Indonesian e-commerce platform, marking a first-of-its-kind investment for TikTok Shop, the growing arm of ByteDance’s video service. While the final details are still being negotiated, the companies aim to announce the tie-up next week, subject to regulatory approval.

The move comes after Indonesia imposed a ban on e-commerce transactions on social media in September, leading TikTok to explore partnerships with local firms. The collaboration with Tokopedia signifies a strategic move for TikTok to navigate regulatory challenges and revive its online shopping service in Southeast Asia’s largest retail market. Indonesia is the largest market for TikTok Shop, which started its service in the country in 2021 and has since expanded into other markets, including the United States.

For GoTo Group, Indonesia’s largest internet company, the deal involves potential risks as it supports a major online retail rival entering the Indonesian market. However, it could also provide a strong global social media partner for GoTo, fostering collaboration in shopping, logistics, and payments.

While representatives for TikTok and GoTo declined to comment, the tie-up signals TikTok’s efforts to engage government officials and navigate restrictions to restart its e-commerce operations in Indonesia. Indonesia’s move to regulate TikTok and its e-commerce operations is being closely watched by other countries, including Malaysia, amid growing global scrutiny of the platform over national security concerns.

This investment and collaboration showcase TikTok’s adaptive approach to navigate regulatory challenges and expand its presence in e-commerce markets, potentially setting a template for the platform’s expansion in other regions. The deal aligns with TikTok’s broader strategy to invest billions of dollars in the Southeast Asian region.

As governments worldwide assess TikTok’s growing e-commerce influence, its ability to collaborate with local partners becomes crucial for sustained growth and regulatory compliance. The tie-up with Tokopedia offers a strategic solution to address regulatory concerns and strengthen TikTok’s position in the dynamic Southeast Asian market.