1. GoTo and TikTok have formed a strategic partnership in Indonesia aimed at serving micro, small, and medium-sized enterprises (MSMEs)

2. Analysts suggest that Shopee, the e-commerce arm of Sea Limited, may face increased pressure from the combined forces of GoTo's Tokopedia and TikTok in Indonesia.

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3. Sea Limited's U.S.-listed shares closed 5.33% lower at $37.87 after the announcement, with concerns about Shopee's profitability.

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4. As part of the partnership, TikTok will take a controlling stake of 75.01% in an enlarged Tokopedia entity, investing $1.5 billion over time.

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5. The deal is seen as a strategic move by GoTo and TikTok to strengthen TikTok Shop's presence in Indonesia's e-commerce space.

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6. The announcement follows Indonesia's ban on e-commerce on social media platforms in October, which affected TikTok's e-commerce service.

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7. TikTok Shop will gain full operational control and legitimacy for operating e-commerce, posing a challenge to local incumbents.

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8. Indonesia, with 125 million TikTok users, represents the largest Southeast Asian market and the second-largest global market for TikTok.

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9. Analysts suggest that Shopee needs a clear strategy to compete, and the key to winning might not solely be in e-commerce.

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10. GoTo's Jakarta-listed shares initially dropped 20% after the announcement but rebounded over 3% on Tuesday, reflecting mixed investor sentiments.

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