Chinese e-commerce platform Temu suspends operations in Vietnam

Temu, a prominent Chinese e-commerce platform, has suspended its operations in Vietnam after failing to secure the necessary permit from Vietnamese authorities.

The move follows a meeting with the Ministry of Industry and Trade (MoIT), which requested the platform to halt its services until it is officially licensed.

As a result, orders placed on Temu cannot be processed for customs clearance into Vietnam. The MoIT has stated that customs authorities will not proceed with clearing goods traded through the platform until Temu receives the required approval.

The ministry's Vietnam E-Commerce and Digital Economy Agency (VEDEA) is continuing its collaboration with the National Competition Commission to ensure cross-border e-commerce platforms fulfill their obligations to Vietnamese consumers.

As part of these efforts, Temu and other platforms must adhere to consumer protection laws and regulations in Vietnam.

In response to the suspension, Temu has switched its interface language from Vietnamese to English across both its app and website. Currently, users in Vietnam can only choose one of the three languages: English, Chinese, and French.

Temu confirmed that it would reinstate Vietnamese language support once the registration process is completed and the platform is officially licensed.

The MoIT has previously mandated that all e-commerce platforms operating in Vietnam must register with the ministry to comply with local regulations. Platforms are required to notify consumers of any changes during the registration period, with the ministry urging operators to complete their registration by November. Failure to do so could result in access restrictions.

During this registration process, Temu is required to suspend any services, commerce, or advertising activities that violate Vietnamese law. The platform must also review its compliance with other regulations, including those related to taxes and customs.

The General Department of Vietnam Customs has issued instructions to prevent the clearance of goods from platforms that have not registered in the country.

Temu, which first appeared on Facebook in August 2022, gained significant traction among Vietnamese consumers by offering low-priced, well-designed products. The platform frequently offered discounts of up to 90% and free shipping, driving its rapid growth in the region.

Launched as the international version of China’s Pinduoduo, Temu allows users to connect directly with Chinese manufacturers, providing international customers with affordable goods. Since its launch in the U.S. in September 2022, the platform has expanded to Canada, Australia, New Zealand, Europe, and Southeast Asia.

Temu's aggressive pricing and growth strategy have propelled it to become the second most popular e-commerce platform globally, with 663 million monthly visits in Q3/2024, trailing only Amazon.

Temu’s expansion has raised concerns in several Southeast Asian countries. Indonesia has already banned the platform, while Thailand and other nations have introduced measures requiring foreign e-commerce companies to establish local offices.

These regulations are designed to ensure that foreign platforms comply with national tax and legal frameworks, just as local businesses are required to do.

As the platform navigates regulatory challenges in the region, its suspension in Vietnam highlights the growing scrutiny of cross-border e-commerce platforms and the need for compliance with local laws.