Vietnam Issues Ultimatum to Shein and Temu: Register with Government or Face Block

Vietnam demands that Shein and Temu register with the government by the end of November or face a blockage. Concerns have been raised about the impact of Chinese online platforms on local markets in Vietnam. Shein agrees to follow Vietnamese laws, while Temu has yet to respond to the ultimatum.

Credit: TEMU

Failure to comply will result in their internet domains and apps being blocked in the country. The Vietnamese government and local businesses have expressed concerns about the impact of Chinese online platforms on local markets, particularly due to deep discounts and the potential sale of counterfeit items.

Nguyen Hoang Long, Vietnam's deputy trade minister, emphasised the importance of compliance during a government meeting, stating that if Shein and Temu do not comply with the registration requirement, the Ministry of Industry and Trade will take technical measures such as blocking applications and domains.

Shein, a fast-fashion retailer, has been operating in Vietnam for more than two years and has guaranteed compliance with Vietnamese laws and regulations. The company stated that it sells its products directly to Vietnamese consumers and is actively working with local authorities on this issue. On the other hand, Temu, owned by Chinese e-commerce giant PDD Holdings, did not provide an immediate response to the request for comment.

Vietnam currently allows imported goods valued up to 1 million dong (US$40) to be exempt from a value-added tax. The finance ministry is contemplating the termination of this tax break, as most items benefiting from it are imported through e-commerce platforms. Both Shein and Temu are facing increased scrutiny and legal challenges in other regions as well. Indonesia recently urged Apple and Google to block Temu from their app stores to safeguard small merchants from competing with ultra-cheap items.

The e-commerce market in Vietnam has experienced significant growth, reaching US$22 billion this year, making it the third-largest in Southeast Asia after Indonesia and Thailand. Notable e-commerce platforms operating in Vietnam include Singapore-based Shopee, Alibaba-backed Lazada, and domestic companies Tiki and Sendo.

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• Vietnam demands Shein and Temu to register with the government by November's end or face blockage.

• Concerns raised about the impact of Chinese online platforms on local markets in Vietnam.

• Shein commits to complying with Vietnamese laws, while Temu is yet to respond to the ultimatum.

Source: REUTERS