E-commerce platform Tokopedia, part of Indonesia’s largest listed tech group PT GoTo Gojek Tokopedia Tbk, on Monday announced an increase in commission fees to its merchants, starting early January 2023.
The fees will now range between 1% and 4.5% of the product price, compared with 0.5% and 3% previously. The hike will depend on the type of goods sold and the type of merchant selling the goods.
“The adjustments have been made with consideration for merchants at different stages of their business and categories,” Ekhel Chandra Wijaya, Tokopedia’s head of external communications, said.
Tokopedia offers three tiers of membership for sellers, such as Regular Merchant for those who just started selling their goods; Power Merchant and Power Merchant PRO; and Official Store for brand owners or official distributors.
“We continue to monitor and improve the cost-effectiveness of our incentives and fees, striving to find the appropriate balance between providing value to merchants and consumers, and ensuring the ongoing health of our business. Our take rate is still relatively low compared with our global peers, and we believe that there is room for us to find additional ways to add value for merchants such as the provision of value-added services to customers,” Wijaya said.
The move would be Tokopedia’s second change in merchant payments in less than a year, after the introduction of category commissions in May, noted Niko Margaronis, an analyst at BRI Danareksa Sekuritas.
On top of the fees, Tokopedia is set to increase fees for merchants applying for the free shipping feature to 4% of each transaction next January from 2.5-3.5% at present. The platform has also applied a 1,000 rupiah charge per consumer transaction in the third quarter of 2022.
This, however, should not come as a surprise, according to analysts who spoke to DealStreetAsia. Shopee has also planned to raise commission fees for Star and non-Star merchants in January 2023.
“It would be interesting to see if this hampers gross transaction value (GTV) growth,” Margaronis said, noting that GoTo’s GTV may still have the potential to grow as merchants are conditioned to remain as Power Merchants despite higher fees because the status and its perks increase productivity.
Tokopedia reported nearly 70 trillion in GTV in the third quarter of 2022, a 15% increase from the same period a year earlier. Its gross revenue increased 27% on an annual basis to 2.2 trillion rupiah in the period.
Tokopedia’s move on Monday seems to have had a positive effect on GoTo’s share price a day later. The stock has been on a downhill ride since its IPO and failed to perk up despite the company making a public expose to reiterate its focus on growth and profitability.
GoTo’s share price increased 13.79% to 99 rupiah apiece in the first trading session on Tuesday after hitting 108 rupiah apiece, the highest level in a week.
UBS on Monday also upgraded its view on GoTo’s shares from sell to buy based on the expectation that the company will grow its gross merchandise value (GMV) and its adjusted Ebitda will turn positive in the first half of 2025.