Chinese e-commerce platform Temu, operated by PDD Holdings, has been ordered to suspend operations in Vietnam after missing the deadline to complete its business registration, Vietnamese state media reported on Thursday. The Ministry of Industry and Trade confirmed that Temu failed to fulfill the required legal procedures by the end of November, prompting a temporary halt to its activities in the country.
Launched in Vietnam in October, Temu had been notified that compliance with local regulations was essential to continue operations. The failure to register could result in restricted access to Temu’s apps and internet domains within Vietnam, the ministry warned.
The suspension is part of Vietnam’s broader push to regulate foreign-dominated e-commerce platforms operating within its borders. While Temu had started offering its services just two months prior, its abrupt halt highlights Vietnam’s increasingly stringent stance on foreign online retailers.
“The competent authority has requested that Temu temporarily suspend operations in the country,” the Ministry of Industry and Trade told the state-run Vietnam News Agency (VNA).
Details on the duration of the suspension or specific steps Temu must undertake to lift it remain unclear. As of Thursday, Vietnamese language options had been removed from Temu’s website when accessed from within Vietnam.
A statement on the platform’s website noted that Temu is “working with the Vietnam E-commerce and Digital Economy Agency and the Ministry of Industry and Trade to register its provision of e-commerce services in Vietnam.”
Neither Temu nor its parent company, PDD Holdings, have issued public comments on the matter.
The suspension of Temu highlights broader concerns about the influence of foreign e-commerce platforms on Vietnam’s burgeoning digital economy.
The Ministry of Industry and Trade has voiced worries about practices such as deep discounting, which critics argue harm local businesses by undercutting prices and driving unfair competition. Additionally, there are fears regarding the sale of counterfeit products—a persistent issue in global e-commerce.
“The entry of platforms like Temu has introduced a new level of competition for domestic retailers, but it also brings risks related to unfair pricing practices and counterfeit goods,” said Nguyen Phuong Mai, an analyst specializing in Southeast Asian digital markets.
Local businesses have increasingly called for stronger oversight of foreign platforms to ensure fair competition and adherence to Vietnamese regulations.
Temu’s suspension comes at a time when Vietnam is reshaping its tax policies to better regulate the digital economy. Last week, the country’s parliament approved amendments to tax laws aimed at leveling the playing field for local operators and generating additional revenue from foreign e-commerce giants.
Among the key changes is the removal of a tax exemption for low-cost imported goods. Under existing rules since 2010, products worth less than 1 million dong (approximately $40) have been exempt from duties.
The updated legislation mandates local operators of foreign e-commerce platforms to pay value-added tax (VAT) on their transactions. This shift marks a significant departure from previous tax frameworks and is expected to impact foreign platforms like Temu, Shopee, and Lazada.
“The VAT exemption has long provided a competitive edge to foreign platforms importing low-cost goods, which has disadvantaged local businesses,” explained Tran Duc Thanh, a senior tax consultant. “Removing this exemption sends a clear signal that Vietnam is prioritizing fair competition.”
Vietnam’s e-commerce sector has grown rapidly in recent years, driven by a young, tech-savvy population and increasing internet penetration. According to a report by Google, Temasek, and Bain & Company, Vietnam’s digital economy is on track to reach $49 billion by 2025, fueled largely by e-commerce.
However, foreign platforms dominate the market, often offering aggressive pricing strategies that challenge local players. Temu’s entry into Vietnam in October was seen as a move to capture a slice of this lucrative market.
Despite the suspension, analysts believe that Temu’s efforts to establish a foothold in Vietnam underscore the importance of the market to Chinese e-commerce players. PDD Holdings, which also operates the popular Chinese platform Pinduoduo, has been expanding internationally as part of its global growth strategy.
Temu’s situation is not unique. Vietnam’s move reflects a growing trend among Southeast Asian nations to assert greater control over the operations of foreign tech giants. Regulatory scrutiny has increased across the region as governments seek to address challenges associated with cross-border e-commerce.
In Indonesia, similar measures have been implemented to ensure compliance with tax and consumer protection laws. Malaysia and Thailand are also strengthening regulations on foreign e-commerce operators.
Vietnam’s regulatory focus aligns with broader global efforts to create a fairer digital marketplace. By enforcing stricter registration and tax requirements, the government aims to prevent tax evasion, curb unfair competition, and ensure consumer safety.
While Temu’s future in Vietnam remains uncertain, its suspension underscores the challenges that foreign platforms face when navigating diverse regulatory environments. Industry experts believe Temu must prioritize compliance with Vietnamese laws to restore its operations.
“It’s a wake-up call for e-commerce platforms to treat regulatory compliance as a core business function, especially in emerging markets like Vietnam where digital policies are evolving rapidly,” noted Linh Vu, a digital policy consultant.
For Vietnam, the suspension of Temu sends a strong message about the importance of adhering to local regulations. As the government continues to refine its policies, businesses will need to adapt to new expectations in a market poised for significant growth.
- Regulatory Pressure: Vietnam’s government is stepping up oversight of foreign e-commerce platforms, focusing on registration and tax compliance.
- Market Dynamics: Temu’s suspension highlights tensions between foreign platforms and local businesses in Vietnam’s competitive e-commerce sector.
- Tax Reforms: Recent changes to tax laws aim to eliminate loopholes benefiting foreign platforms, creating a level playing field for local operators.
- Global Trends: Vietnam’s actions reflect broader efforts across Southeast Asia to regulate the digital economy and assert control over cross-border operations.
As Temu works to resolve its regulatory issues, its experience could serve as a case study for other foreign e-commerce companies eyeing expansion into Vietnam. Whether the platform can regain its footing will depend on its ability to meet the demands of an increasingly assertive regulatory environment.
