Vietnam Warns Chinese E-Commerce Giant Temu: Comply or Face Block

Lahore: Vietnam's Ministry of Industry and Trade has issued a stern warning to Chinese e-commerce platform Temu, urging it to comply with Vietnamese regulations or risk being blocked in the country. The Ministry’s recent directive requires Temu to officially register in Vietnam, a move that could significantly impact the platform’s operations in the fast-growing Vietnamese e-commerce market.

Compliance or Consequences

The Vietnam e-Commerce and Digital Economy Agency has been tasked with reaching out to Temu by the end of this month to deliver the ministry's warning. If the company fails to cooperate, the Ministry of Industry and Trade, in coordination with the Ministry of Information and Communications, may block access to Temu’s platform within the country.

Under Vietnamese law, cross-border e-commerce platforms must register in Vietnam if they meet any of the following criteria: using a Vietnamese domain, displaying content in the Vietnamese language, or recording 100,000 transactions annually within the country. Despite launching operations for Vietnamese consumers last month, Temu has yet to complete its registration, prompting the government’s current stance.

Protecting Consumers and Ensuring Fair Competition

The Ministry has also advised Vietnamese consumers to exercise caution when shopping on online platforms that have not been officially registered in Vietnam. According to Deputy Minister of Industry and Trade Ho Duc Phoc, Temu is expected to comply with the same tax obligations as major foreign companies like Google and Facebook, which have registered and pay taxes on their Vietnamese operations.

The Vietnamese government’s warning is aimed at leveling the playing field for registered e-commerce players while protecting local consumers from potential risks associated with unregulated platforms.

E-Commerce Competition Heats Up

Vietnam’s e-commerce market is highly competitive, with Singapore-based Shopee leading the sector with a 71% market share in the second quarter of 2024, according to data from YouNet ECI. Other prominent players include TikTok Shop, Lazada, and Tiki, which have established strong footholds in the market by adhering to local laws and regulations.

As the Vietnamese government takes steps to enforce compliance, Temu’s ability to navigate these regulatory challenges will be key to its continued operations in the country. The outcome could set a precedent for other cross-border e-commerce platforms looking to enter Vietnam’s vibrant digital economy.

Stay tuned to EcomNews for updates on the evolving e-commerce landscape in Vietnam and other Southeast Asian markets.