Temu and Shein Temporarily Suspend Operations in Vietnam Amid E-commerce Crackdown

Temu and Shein have suspended operations in Vietnam to comply with registration requirements. Vietnamese government raised concerns about aggressive pricing and counterfeit goods. Temu faces suspension after missing registration deadline; Shein's operations status unclear.

Credit: TEMU

The move comes in response to concerns raised by the Vietnamese government and local businesses regarding the impact of aggressive pricing strategies by Chinese online platforms and the potential sale of counterfeit goods.

Last month, the Vietnamese government issued a directive to Shein and Temu, instructing them to complete their registration by the end of November. Failure to comply would result in the blocking of their internet domains and the suspension of their apps in the country.

Temu, a subsidiary of Chinese e-commerce powerhouse PDD Holdings, had recently opened its doors to Vietnamese shoppers in October. Meanwhile, Shein, a popular fast fashion retailer, has been operating in Vietnam for over two years. However, the Vietnamese trade ministry announced on Thursday that Temu must suspend its operations in the country due to missing the registration deadline.

According to the ministry, Temu's operations will remain on hold until the registration process is successfully completed. The platform has already submitted its application for e-commerce activities in Vietnam, which is currently under review by the authorities. The duration of the suspension and the specific requirements for Temu to resume operations have not been disclosed.

In response to inquiries, Temu stated that it had submitted all necessary documents for registration but did not provide a timeline for the resumption of its services. Vietnamese-language options were notably absent from Temu's website when accessed from Vietnam, with the company confirming its collaboration with Vietnamese regulatory bodies to formalise its e-commerce services in the country.

While it remains unclear if Shein's operations have also been suspended, its Vietnamese website was inaccessible. Shein assured customers that it is working closely with the trade ministry to register its services and reiterated its commitment to complying with local laws and regulations.

In a bid to protect small merchants, Indonesian regulators have requested tech giants Google and Apple to block Temu from their app stores in the country. Additionally, Vietnam recently approved legal amendments requiring local operators of foreign e-commerce platforms to pay value-added tax (VAT) and proposed the elimination of tax exemptions for low-cost imported goods.

The changes mark a significant shift for the foreign-dominated e-commerce sector, which has benefited from VAT exemptions and import duty waivers on goods valued at less than US$40. The Vietnamese finance ministry has initiated the process to abolish the tax break, signalling a challenging road ahead for foreign e-commerce players in the region.

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• Temu and Shein have suspended operations in Vietnam to comply with registration requirements.

• Vietnamese government raised concerns about aggressive pricing and counterfeit goods.

• Temu faces suspension after missing registration deadline; Shein's operations status unclear.

Source: REUTERS