Vietnam suspends Temu operations over registration issues

Chinese e-commerce giant Temu has been forced to temporarily halt its operations in Vietnam due to its failure to meet the country’s business registration deadline. The decision comes as part of Vietnam’s efforts to regulate the booming e-commerce sector and protect domestic businesses.

Temu, owned by PDD Holdings, launched its services in Vietnam in October 2023, quickly gaining popularity among Vietnamese consumers with its low prices and wide range of products. However, the platform’s rapid expansion has raised concerns among Vietnamese authorities, who have been scrutinizing its compliance with local regulations.

Under Vietnamese law, foreign e-commerce platforms are required to register with the Ministry of Industry and Trade to operate legally in the country. The deadline for Temu to complete its registration process was November 30, 2023. Failing to meet this deadline has resulted in the suspension of its operations.

The Ministry of Industry and Trade has cited concerns about the potential impact of Temu’s aggressive business practices on the Vietnamese market, including its use of deep discounts and the sale of counterfeit goods. Additionally, recent legislative changes in Vietnam have imposed stricter regulations on foreign e-commerce companies, such as mandatory VAT payments for local representatives and the removal of exemptions on low-priced imports.

Temu’s suspension highlights the challenges faced by foreign e-commerce companies in Vietnam, which has emerged as a lucrative market for online retailers. While the country offers significant growth opportunities, it also has a complex regulatory environment that can be difficult to navigate.

The impact of Temu’s suspension on Vietnamese consumers remains to be seen. Many consumers have expressed disappointment over the loss of a convenient and affordable shopping option. However, some have also voiced concerns about the quality of goods sold on the platform and the potential risks associated with cross-border transactions.

Temu has not yet commented on the suspension or provided a timeline for its potential resumption of operations in Vietnam. The company is reportedly working with local authorities to address the registration issues and secure the necessary permits.

In the meantime, Vietnamese consumers will have to rely on other e-commerce platforms, both domestic and international, to meet their online shopping needs. The suspension of Temu serves as a reminder of the importance of regulatory compliance for foreign companies operating in Vietnam and the potential consequences of failing to adhere to local laws and regulations.