Temu Suspended in Vietnam After Failing to Meet Registration Deadline

Temu, a platform often described as one of the fastest-growing e-commerce companies globally, has recently faced significant regulatory hurdles in Vietnam. The online shopping giant was ordered to temporarily suspend its services in the country due to its failure to meet a government-mandated registration deadline by the end of November.

This decision highlights Vietnam’s firm approach to enforcing compliance within its e-commerce landscape, especially concerning foreign operators.

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Vietnam’s Concerns Over Temu’s Operations

The Vietnamese Ministry of Industry and Trade (MoIT) had earlier flagged concerns in October about the unusually low prices offered on Temu’s platform. These pricing strategies, often involving discounts of up to 90%, raised alarms about their potential impact on domestically produced goods and the overall health of local markets. The ministry also questioned the authenticity of goods sold on the platform, emphasizing the need for regulatory oversight.

Temu, which launched in Vietnam in October 2023, saw rapid adoption due to its aggressive pricing and marketing strategies. However, its failure to register for e-commerce service activities in Vietnam led to swift action by the authorities. Vietnam’s customs services have also stopped clearing goods ordered via the platform, further intensifying the impact of the suspension.

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Official Statement and Actions Taken

In a statement issued on Thursday, the MoIT confirmed Temu’s temporary suspension. “Temu operations will be temporarily suspended until it completes the registration procedure. The platform has submitted an application for e-commerce service activities in Vietnam, which is under authorities’ review,” the ministry said. However, no specific timeline was provided regarding how long the suspension might last or what additional steps the company must take to regain full operational status.

On the Temu app, the absence of Vietnamese as an interface language has also drawn criticism. Currently, users can only select from English, Chinese, and French, raising questions about the platform’s commitment to tailoring its services for the local market.

Temu’s Response

Temu has publicly stated that it is actively working with the Vietnam E-commerce and Digital Economy Agency and the Ministry of Industry and Trade to complete the required procedures. According to a company spokesperson, all necessary documents for regulatory approval have already been submitted. “We have submitted all required documents for the registration,” the spokesperson reiterated, signaling the company’s intention to resolve the matter promptly.

The Larger Implications of Temu’s Suspension

Temu’s temporary suspension is emblematic of Vietnam’s rigid stance on foreign e-commerce operators. The country has been proactive in addressing the challenges posed by platforms like Temu, particularly concerning their potential to disrupt local markets.

The Ministry of Industry and Trade’s concerns extend beyond pricing to include the potential sale of counterfeit or substandard goods. Local businesses and trade associations have voiced their support for stricter regulations, citing unfair competition from Chinese-owned platforms like Temu. Additionally, Vietnam’s regulatory framework now requires foreign e-commerce platforms to register with the government and comply with local tax laws, signaling a broader push to tighten oversight in this rapidly growing sector.

Broader Regulatory Trends in Vietnam’s E-Commerce Landscape

Vietnam recently approved changes to its tax laws, which will require local operators of foreign e-commerce platforms to pay value-added tax (VAT). This legislative shift is set to eliminate a longstanding tax exemption for low-cost imported goods, a move expected to impact foreign e-commerce giants significantly. Under the previous rules, imported goods valued at under 1 million dong (approximately $40) were exempt from duties. The removal of this exemption represents a significant blow to companies like Temu, which have thrived on offering deeply discounted products.

The finance ministry has begun scrapping this tax break, aiming to level the playing field for domestic producers and ensure that foreign platforms contribute their fair share to the local economy. This development underscores Vietnam’s commitment to creating a balanced e-commerce ecosystem that supports local businesses while welcoming international players willing to adhere to its rules.

Temu’s Global Regulatory Challenges

Vietnam is not the only market where Temu has faced regulatory scrutiny. Earlier this year, South Korean regulators launched an investigation into the platform, citing concerns over unfair practices such as false advertising and subpar product quality. Similarly, the European Union initiated a probe in late October to address worries about the sale of illegal products on the platform.

In Indonesia, authorities took decisive action to protect small merchants by requesting Google and Apple to block Temu’s app from their stores. These actions reflect a growing trend of governments taking a stand against the unchecked expansion of foreign e-commerce platforms that often prioritize rapid growth over regulatory compliance.

Temu’s Expansion Into New Markets

Despite its challenges, Temu continues to expand aggressively into new markets. In Nigeria, for instance, the company’s advertisements have recently dominated the digital landscape, sparking curiosity among consumers. Although Temu has yet to officially announce its entry into the Nigerian market, its targeted ads and growing social media buzz suggest that the platform is exploring opportunities to tap into one of Africa’s largest consumer bases.

However, Temu’s struggles in Vietnam and other regions serve as a cautionary tale. Regulatory compliance and building trust with local authorities are essential for long-term success, particularly in markets with stringent oversight.

Conclusion

Temu’s suspension in Vietnam underscores the complexities of navigating regulatory landscapes in emerging markets. While its aggressive pricing and marketing strategies have garnered significant consumer interest, they have also attracted heightened scrutiny from governments concerned about the impact on local economies. As Vietnam continues to enforce stricter regulations to protect its domestic industries, foreign e-commerce players like Temu will need to adapt their strategies to ensure compliance and maintain consumer trust.

This episode highlights the importance of regulatory foresight and adaptability in today’s global e-commerce arena. For Temu, Vietnam’s temporary suspension serves as both a challenge and an opportunity—a chance to refine its operations and demonstrate its commitment to being a responsible and compliant global player.