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TikTok Considers Sell-Off to Appease Concerns Around Ownership Conflicts

Published

9 months ago

March 15, 2023

EU Officials Told to Remove TikTok From Official Devices Due to Security Concerns

With TikTok facing a potential ban in the US, the company is already working on contingency plans, which, in a worst-case scenario, may see parent company ByteDance sell off TikTok in order to maintain its operations and revenue potential.

As reported by Bloomberg:

“TikTok’s leadership is discussing the possibility of separating from ByteDance, its Chinese parent company, to help address concerns about national security risks. A divestiture, which could result in a sale or initial public offering, is considered a last resort, to be pursued only if the company’s existing proposal with national security officials doesn’t get approved, according to people familiar with the matter.”

That’s a similar path to what TikTok was almost forced into back in 2020, when then President Donald Trump called for the app to be sold into US ownership, or face a full ban.

The Biden Administration eventually abandoned those plans, which, at one stage, had Microsoft and Oracle as the front runners to purchase the app. But now, amid growing concerns from cybersecurity experts, and increasing tensions with the Chinese government, The White House may once again be close to pushing TikTok into drastic action.

Though even that may not be a viable path. The Chinese Government would still have some say over say such action, and would have to approve the sell-off – which, given its various statements on the actions taken against TikTok thus far, it may not be willing to do.

Last month, in response to the growing bans of TikTok on government-owned devices in the US, Chinese Foreign Ministry spokesperson Mao Ning said that:

“[The US government] has been overstretching the concept of national security and abusing state power to suppress other countries’ companies. How unsure of itself can the US, the world’s top superpower, be to fear a young person’s favorite app to such a degree?”

This has been a common refrain from the CCP, that the US should not have the power to simply cancel a Chinese-owned app without clear reason for such.

It seems likely that the CCP would be none too pleased about a forced sell-off of a Chinese asset for the same reason – so even if TikTok and ByteDance were to explore this avenue, it still may not be possible under the current process.

Really, the next stage for the app hinges on the appearance of TikTok CEO Shou Zi Chew before the US House Energy and Commerce Committee, which will happen on March 23rd, where Chew will be questioned about the app, and the capacity for data sharing with Chinese-based groups.

If Chew’s answers fail to win over US senators, then you can bet that the calls for a TikTok ban will get even louder, while another spy balloon-type incident could be all that’s needed to force President Biden’s hand – and Biden does now have the power to ban the app, if he sees fit.

It seems likely that a compromise, of some kind, will need to be met, but the tense atmosphere around US-China relations doesn’t bode well for the app, as it currently stands.

I would still bet on TikTok continuing on in some form, but as noted, there are various elements at play that could indeed see it gone before the year is out.

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TikTok announces $1.5 bn deal to restart Indonesia online shopping business

Published

2 hours ago

December 11, 2023

Entireweb News Bot

TikTok has around a billion montly users and its growth among young people far outstrips its competitors – Copyright AFP/File SEBASTIEN BOZON

Chinese-owned short video app TikTok on Monday announced a $1.5 billion investment in GoTo group in a deal that would allow it to restart its online shop in Indonesia, the companies said in a statement.

Under the deal, TikTok Shop will be merged into GoTo’s Tokopedia, and TikTok will have a controlling stake in that entity.

“TikTok has committed to invest over US$1.5 billion in the enlarged entity over time, to provide future funding required by the business, without additional dilution to GoTo,” the Indonesian firm said.

“TikTok, Tokopedia and GoTo will transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years.”

“The strategic partnership will commence with a pilot period carried out in close consultation with and supervision by the relevant regulators,” GoTo said, adding that it expected the deal to close in 2024.

TikTok in October shut down its online shop in Indonesia, one of its biggest markets.

That came days after Southeast Asia’s largest economy banned sales on social media to protect millions of small businesses.

The regulation means social media firms cannot conduct direct transactions but only promote products on their platforms in Indonesia, the first country in the region to act against TikTok’s growing popularity as an e-commerce site.

Indonesia’s e-commerce market is dominated by platforms such as Tokopedia, Shopee and Lazada but TikTok Shop gained a significant market share since launching in 2021.

Indonesia, with 125 million users, is TikTok’s second-largest global market after the United States, according to company figures.

The Indonesian ban came after calls grew for regulation governing social media and e-commerce, with offline sellers seeing their livelihoods threatened by the sale of cheaper products on TikTok Shop and other platforms.

The regulation was yet another setback for TikTok, which has faced intense scrutiny in the United States and other nations in recent months over users’ data security and the company’s alleged ties to the Chinese government.

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TikTok spends $1.5B on Tokopedia JV to get around Jakarta social e-commerce ban

Published

9 hours ago

December 11, 2023

Entireweb News Bot

TikTok spends $1.5B on Tokopedia JV to get around Jakarta social e-commerce ban

Just two months ago, ByteDance-owned TikTok abruptly closed its shopping platform in Indonesia to comply with surprise regulations from the Southeast Asian country’s government. Jakarta ordered social media companies like TikTok and Facebook to stop selling goods on their platforms, demanding a separation of social media and e-commerce services.

TikTok now seems to have found a way to revive its e-commerce dreams in Indonesia by spending billions to start a joint venture with Indonesian tech giant GoTo. On Monday, the two companies announced that TikTok Shop will now be available on GoTo’s Tokopedia platform.

“Tokopedia and TikTok Shop Indonesia’s businesses will be combined under the existing PT Tokopedia entity in which TikTok will take a controlling stake. The shopping features within the TikTok app in Indonesia will be operated and maintained by the enlarged entity,” TikTok said in a statement Monday.

TikTok will invest over $1.5 billion into Tokopedia, taking a 75% stake in the platform. GoTo will remain an ecosystem partner to Tokopedia and receive an “ongoing revenue stream from Tokopedia commensurate with its scale and growth,” but will not be required to continue funding the platform. Further funding from TikTok also won’t reduce GoTo’s remaining 25% stake.

Getting back into the Indonesian ecommerce market will be a win for TikTok. Indonesia, which is the platform’s largest market outside of the U.S., is key to Tiktok’s online shopping aspirations. In June, CEO Shou Zi Chew pledged to “invest billions in Indonesia and Southeast Asia over the next few years.”

ByteDance wants to replicate its Chinese e-commerce successaround the globe. Last year, consumers spent in China 1.41 trillion yuan ($196 billion) on products sold on Douyin, the version of TikTok for the Chinese market, The Information reported in January. ByteDance, through TikTok, is expanding its online shopping services in both Southeast Asia and the U.S. Yet the company is struggling to win over American consumers: The Information reported in August that U.S. shoppers are spending just $4 million a day, equivalent to $1.4 billion over a whole year, on goods sold on the social media platform. (TikTok officially launched TikTok Shop in the U.S. in September, though sellers have complained about a flood of low-quality products on the platform).

Before Indonesia imposed its ban in September, the country’s president, Joko Widodo, complained that social media platforms were threatening local micro-, small- and medium-sized enterprises. Government officials also accused TikTok of engaging in predatory pricing.

GoTo’s deal with TikTok means the Indonesian tech giant is giving up its majority ownership of Tokopedia . Tokopedia started in 2008 and grew to be one of Indonesia’s largest e-commerce platforms. The company merged with ride-hailing startup GoJek in 2021, becoming GoTo Group. The company debuted on Jakarta’s stock exchange in April last year.

Yet the company has struggled to wow investors since then. GoTo has yet to make a profit since becoming a public company. The tech firm reported 2.4 trillion Indonesian rupiah ($147 million) in net losses last quarter, significantly less than the 6.7 trillion rupiah ($428 million) it lost this time last year.

Investors do not appear to be thrilled by the news of GoTo’s TikTok partnership. Shares fell by over 19% by 2:30pm Indonesia time on Monday, erasing gains made late last week as rumors began to build of the new partnership.

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How to Train ChatGPT to Write in Your Brand’s Tone of Voice [Infographic]

Published

15 hours ago

December 11, 2023

Entireweb News Bot

Are you looking for ways to improve your ChatGPT output? Want to train it to write in a more unique tone of voice, in order to better suit your branding?

The Creative Marketer shares his ChatGPT prompt tips in this infographic. To enact these, add “Write like [INSERT CHARACTER]” at the start of your ChatGPT instructions.

TCM breaks things down into the following categories: