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The landscape of e-commerce in Vietnam was recently upset by the suspension of platform operations Temu. This decision, announced by the Vietnamese authorities, stems from the application’s failure to comply with the registration deadline imposed by the government. Temu, which benefits from the support of the Chinese giant PDD Holding, saw its goods blocked at customs clearance, thus causing a complete halt to its services in the country. This turnaround highlights the regulatory challenges foreign companies face when entering the Vietnamese market.
The online commerce platform Temu was recently suspended in Vietnam due to failure to comply with registration requirements with local authorities. This suspension has consequences not only for Vietnamese consumers, but also for the e-commerce ecosystem in the region, precipitating reflection on the regulation of new entrants to the market.
The reasons for Temu’s suspension
The Vietnamese government has decided to suspend Temu after the company failed to meet the deadline for its official registration, which was the end of November. The application, belonging to the Chinese giant PDD Holding, saw its goods cleared through Vietnam stopped overnight, forcing users to turn to other platforms.
The Ministry ofIndustry and Commerce of Vietnam stressed that this withdrawal was necessary to ensure compliance with the rules and regulations in force. Authorities had previously expressed concerns that the abnormally low prices offered by the platform could harm Vietnamese producers. These observances are part of a broader regulatory framework which aims to protect local markets.
Impacts on Vietnamese consumers
The suspension of Temu represents a considerable loss for Vietnamese consumers who had become accustomed to very competitive prices, with discounts sometimes reaching up to 90%. Since its launch in October, Temu had quickly gained popularity with its attractive prices and free shipping, attracting the attention of a wide audience.
Today, Vietnamese users find themselves without access to the app’s Vietnamese interface, being forced to navigate in English, French or Chinese. This represents a substantial change that could deter a portion of potential customers, thereby reducing the app’s reach in the country.
Situation of other e-commerce platforms
Alongside Temu, the platform Shein also reported similar complications with its Vietnam activity. Originally founded in China and now based in Singapore, Shein announced that its Vietnamese site was temporarily unavailable and that it was working with authorities to regularize its status. Although having the same deadline as Temu to register, the company appears to have more promising regularization pathways at this stage.
Future prospects for Temu
A spokesperson for Temu told AFP that the company was working with the Vietnamese authorities to regularize its situation. “We have submitted all required documents for registration”, he clarified. However, uncertainty remains as to when the platform will be able to resume operations in Vietnam.
This situation raises important questions about the sustainability of business models based on extremely low prices and the legal obligations of companies operating in the Vietnamese market. Temu, which is also experiencing difficulties in Europe in the face of a European Union investigation into the sale of potentially illicit products, may need to rethink its strategy to work in harmony with local regulations.
The regulatory context in Vietnam
This case illustrates a broader trend of regulation of online commerce platforms that operate in emerging markets like Vietnam. Governments are increasingly seeking to impose standards and limits to protect their economies against possible distortions caused by outside companies. Failure to follow the rules can lead to tragic disruptions for these new businesses, requiring them to face compliance challenges before they even become firmly established.
For a more in-depth analysis of the reasons leading to the suspension of Temu operations, you can consult the following articles: source here, source here, source here, source here, source here.
FAQ on the suspension of the Temu e-commerce platform in Vietnam
What is the reason for Temu’s suspension in Vietnam? The Temu platform was suspended in Vietnam due to its non-compliance registration deadlines imposed by the government.
What consequences does the suspension of Temu have for users? Goods ordered on Temu are no longer cleared in Vietnam, preventing users from receiving their orders.
Is Temu making any efforts to resolve this situation? Yes, a Temu spokesperson indicated that they worked with the authorities Vietnamese to officially register.
What is the impact of this suspension on the Vietnamese market? The Ministry of Industry and Commerce expressed concerns regarding Temu’s extremely low prices and their potential effect on Vietnamese producers.
Are there other e-commerce platforms affected by this issue? Yes, the Shein platform is also waiting forregistration and said its Vietnam site was temporarily unavailable.
When did Temu start operating in Vietnam? Temu started its activities in Vietnam in october and has since attracted a lot of attention thanks to its aggressive promotions.
Is Temu facing further investigations outside of Vietnam? Yes, the platform is under investigation by theEuropean Union and the authorities of South Korea for various reasons, including suspicion of unfair practices.