Temu’s meteoric rise just hit a wall in Vietnam.
The Chinese e-commerce giant has been forced to suspend operations after missing a business registration deadline.
But this is not about missed deadlines. It’s about protecting Vietnam’s economy — and giving local manufacturers and retailers a rare moment to exhale.
Vietnam’s trade ministry has been stink-eyeing Temu’s 90% discounts and free shipping deals since Day 1. The platform’s flood of cheap goods coming directly from China undercuts local retailers, making it nearly impossible for Vietnamese products to compete.
Up the locals
Leif Schneider, head of Vietnam for law firm Luther, tells MONIIFY that Temu’s business model directly contradicts Vietnam’s restrictive laws on foreign retailers: “It gives no incentive for consumers to buy Vietnamese products.”
Temu’s suspension, paired with changes to tax laws, could level the playing field. Foreign platforms like Temu now face VAT requirements, keeping revenue in Vietnam instead of funneling it overseas, he adds.
The government is also fiercely protective of consumer data, something foreign e-commerce platforms struggle to guarantee, Schneider says.
For local businesses, this is a lifeline. Cheap Chinese imports have squeezed margins for years, and Temu’s pause means consumers might finally look to homegrown options.
Not just Vietnam
Owned by China’s PDD Holdings, Temu launched in 2022 and quickly gained market share in all its live markets, recording sales worth around $20 billion in the first half of this year — easily surpassing e-commerce giant Shein.
But it’s in trouble in more markets than one. Indonesia blocked the platform on app stores, citing the same concerns over local market protection. South Korea launched an investigation into unfair practices and poor-quality goods, and the EU has flagged it for selling illegal products.
With Temu out of the picture, at least temporarily, Vietnam’s local businesses get a chance to reclaim market share. But with Southeast Asia’s rapidly growing e-commerce space, the next battle with Temu could be around the corner.
