HANOI: Chinese online retailers Temu and Shein have suspended their operations in Vietnam as the companies work to register their e-commerce services with the Southeast Asian nation’s authorities, the two companies said on Thursday (Dec 5).
The Vietnamese government and domestic businesses have voiced concern about the impact of deep discounting by Chinese online platforms, with the trade ministry saying it was also worried about potential sale of counterfeits.
Last month, Vietnam told Shein and Temu to register with the government by the end of November or face the blocking of internet domains and a halt in use of their apps.
Temu, owned by Chinese e-commerce giant PDD Holdings , started allowing shoppers from Vietnam in October, while fast fashion retailer Shein has been selling into Vietnam for at least two years.
Vietnam’s trade ministry said on Thursday it had ordered Temu to suspend operations in the country after it missed the business registration deadline.
“Temu operations will be temporarily suspended until it completes the registration procedure,” the ministry said in a statement.
“The platform has submitted an application for e-commerce service activities in Vietnam which is under authorities’ review.”
The ministry did not say how long the suspension would last, nor what steps Temu must take before it is lifted.
On Thursday, Vietnamese-language options were missing from Temu’s website when accessed from Vietnam.
“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,” the company said in a notice on the website.
In response to a Reuters’ email request for comment, Temu said it had submitted all documents required for the registration, but gave no timeframe for resuming operations.
It is not clear if the authorities also halted Shein’s operations, but its Vietnamese website was unavailable, with the company saying it was working with the trade ministry to register services.
“Shein is committed to complying with the laws and regulations of the countries we operate in,” Shein said in an emailed statement, adding that while its Vietnamese website was temporarily unavailable, customers in Vietnam could still shop at its international platform.
The ministry did not immediately respond to a request for comment.
Temu has also stumbled in Indonesia, where regulators have asked Alphabet’s Google and Apple to block it in app stores in the country to protect small merchants.
Last week, Vietnam’s parliament approved legal changes to require payment of value-added tax (VAT) by local operators of foreign e-commerce platforms and urged the scrapping of a tax exemption for low-cost imported goods.
At the time, the finance ministry said it had begun the process to scrap the tax break.
The change spells a blow for the foreign-dominated e-commerce industry, which has benefited since 2010 from a VAT exemption and rules allowing it to avoid duties on imports worth less than 1 million dong (US$40).
Source: CNA
