5 days ago
From marketplace to mess: Tokopedia unravels after merger
IT ALL started with a two million rupiah (S$158) discount.
Ary Mozta, a Jakarta-based marketing executive, runs a Tokopedia shop where he sells his pre-loved electronic gadgets. In April, the marketplace offered him the above coupon, which he can use to offset seller fees.
There was just one catch: he had to migrate to TikTok Shop.
The request was not a surprise. After all, TikTok shelled out US$1.8 billion last year in a megadeal to acquire 75 per cent of Tokopedia, just to keep TikTok Shop running in the country.
Mozta complied with the request. However, the coupon did not work, and he ended up paying the full amount of 1.3 million rupiah.
On May 4, he complained to Tokopedia's customer service team. A month later, the issue has not been resolved. Mozta has since stopped selling on the platform.
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Nearly 1.5 years after the deal was announced, TikTok Shop is still struggling to integrate with Tokopedia. Frustrated sellers have taken to social media to air their complaints about the process.
As ByteDance remakes Tokopedia in TikTok Shop's image, merchants and employees worry it will be a hollowed-out version of its former self. Massive layoffs at TikTok Shop, possibly as soon as July, are also on the table.
A TikTok spokesperson tells Tech in Asia that it is committed to 'continue investing in Tokopedia and Indonesia'.
But beneath the complaints about slumping sales and logistical snags lies something deeper: a sense of loss over an e-commerce platform that was once an important part of many Indonesians' daily lives. Mozta wrote in a LinkedIn post that he 'barely recognises the place'.
Here's where the cracks started to show.
The quiet toll on one merchant
One of TikTok Shop's tweaks? Auto-accepting orders. Not a simple adjustment for Agus Mulyono.
He has run a business card-focused print shop on Tokopedia since 2016. Previously, sellers could manually accept orders, giving them time to check inventory or, in Mulyono's case, confirm whether a customer's file was ready for printing.
With auto-accepting orders, merchants must cancel manually, risking hits to their ratings.
Mulyono's cash flow is also feeling the squeeze. Tokopedia used to release funds two days after delivery, assuming that most buyers rarely hit the 'confirm' button and had received their orders in good condition.
But that grace period has quietly stretched up to six days for non-integrated merchants, while integrated ones get three days.
Free delivery promos can further complicate matters.
Previously, sellers could opt out of offering free delivery. Now, it's mandatory: all Tokopedia Plus members automatically get free shipping, whether sellers like it or not.
'If you are a buyer, of course you are happy, because you can buy something for 10,000 rupiah and still get free delivery,' said Mulyono.
Free delivery promos also lead to another issue. Tokopedia sellers often have preferred third-party logistics (3PLs) providers, based on hard-earned experience.
Mulyono, for example, stands by local player JNE. It's not the cheapest option, but it's consistently reliable.
But sellers cannot choose free delivery couriers – Tokopedia does, based on its own priorities such as cost. Sellers can end up getting stuck with 3PLs that offer lower service levels, like slow pickups or late deliveries.
Mulyono's store sits in a bustling part of Jakarta, so orders are typically picked up the same day or the next. But lately, some have sat untouched for up to two days before a courier shows up.
Not having free rein on couriers can cause friction with Mulyono's customers, who often need business cards on short notice. But more often than not, customers will choose free delivery promos.
Sidelined sellers, silent layoffs
One early red flag for Mulyono came in 2024, when Tokopedia laid off its account managers, including the one he'd worked with.
'From then on, they only provided account managers to national brands such as Unilever,' he said. Tech in Asia understands that non-major brands can still qualify for account managers, but smaller 'homemade' stores – even those with official store status – were generally cut off.
The result: smaller merchants feel sidelined while big brands get top billing. Mulyono saw it firsthand while juggling multiple 3PLs.
'Large brands typically use an e-commerce enabler to handle their e-commerce orders, so this isn't an issue for them,' said a current Tokopedia executive. 'But MSMEs don't have the resources to send packages to multiple 3PLs every day.'
TikTok Shop is also rumoured on social media to be planning the shutdown of Dilayani Tokopedia, a fulfilment service that gave MSME sellers outside Java access to warehouses and cheaper shipping.
Focusing on MSMEs should be a no-brainer for a company with Tokopedia's DNA. But the integration has left not just small merchants but also the company's own staff feeling sidelined.
It's understood that ByteDance, as a global platform, makes strategic calls from its Singapore headquarters and rolls them out top-down.
That includes Tokopedia ads, now folded into TikTok Shop's system. Sellers who want to run campaigns on the platform now have a steeper budget requirement of at least 500,000 rupiah.
The focus now is 'maintenance mode', as in doing business as usual instead of innovating, says one former employee. Resources such as marketing budgets are mostly funnelled to TikTok Shop.
'This has made many employees demotivated,' said the former employee. 'We are less involved in the discovery stage of an initiative and mostly only handle the execution part.'
Layoffs were inevitable. Beyond the 2024 cut of account managers, employees say the hits kept coming, quietly, and more often than the headlines suggest.
'The mass layoffs happened with [junior level] employees at the beginning,' says the current Tokopedia executive. In some divisions, as much as half the team was let go, the person adds.
Some cuts come disguised as performance reviews, suggests the executive. Affected employees often walk away with severance worth about 1.5x their tenure, though the amount can vary.
'In terms of morale, many are already tired and are just waiting for the golden handshake,' said the current executive, referring to the severance package. 'Chances for career advancements are almost nonexistent, and many high-level employees and leaders are also set to be cut.'
A TikTok spokesperson says the company 'routinely evaluates business needs and makes adjustments,' but they declined to share how many have been retrenched since the integration.
Where TikTok takes Tokopedia now
Shopee now dominates Indonesia's e-commerce scene by a wide margin, according to estimates by market intelligence firm Sensor Tower. Tokopedia has slipped behind Lazada as of the first quarter of 2025.
However, according to data on the Tokopedia app, Tokopedia and TikTok Shop together serve 200 million consumers. Since TikTok Shop is not a standalone app, this figure likely reflects TikTok's total user base in Indonesia.
SOURCE: SENSOR TOWER ESTIMATES
There's some concern around anti-competition, but it's not a deal-breaker – as long as Shopee, Lazada, and Blibli are still in the game, says Heru Sutadi, executive director at the Indonesia ICT Institute and a former commissioner at the country's consumer protection agency.
KPPU, the Indonesian commission handling competition laws, recently raised concerns over the TikTok-Tokopedia deal, citing a 'significant increase in market concentration', among other things.
One 'proactive measure,' Sutadi says, is blocking TikTok Shop from selling its own goods on the platform – a response to TikTok's Project S test run in 2023.
Sentimentality aside, Tokopedia has plenty to learn from ByteDance. The former employee admits the Chinese giant is 'far more advanced', with deeper talent, a stronger tech stack, and far bigger bets on R&D.
Still, both Mozta and Mulyono agree that nothing today matches what Tokopedia was in its prime: a homegrown marketplace built for Indonesia.
'Maybe TikTok offers automation, or is faster and cheaper. But if that means sacrificing some parts of our 'local wisdom' or what made the business successful, it's very unfortunate,' Mulyono said. He's still selling with Tokopedia, at least for now.
Could TikTok Shop actually retire the Tokopedia brand? Unlikely, say employees – the reputation risk far outweighs the reward.
'I see all this as a pure business decision,' said the former employee. However, 'it's sad to see [TikTok Shop] slowly tone down a company that we were so proud of.' TECH IN ASIA
